You don’t have to be a keen follower of world events to know that cyberattacks are on the rise. According to Symantec, 2015 saw a record 419 million exposed identities and nine mega data breaches. This was based on data obtained from reported incidents. The figure is much higher if you consider that many companies choose not to reveal data breaches when they occur.
While companies are concerned about the data lost during these attacks, the amount of money lost is no small matter. In 2013, The Wall Street Journal estimated that the U.S. spent $ 100 billion on cybercrime. The cost of cybercrime has since tripled and is expected to increase in coming years.
News reports on data breaches in major companies, retailers and federal agencies have made an impression on many business owners that cybercrime only affect large organizations. But the truth is that all businesses are at risk and no business is too small for hackers.
How Cyber Security Insurance can help
Many businesses, especially small businesses, consider cyber security insurance to be too expensive. Business owners need to weigh the cost of data breaches against the cost of investing in an insurance policy. You’ve invested a lot of sweat and money into building your business, and it’s sad to think a single data breach could bring it to its knees. Investing in cyber security insurance is a no-brainer!
If you’re not convinced, consider the following benefits of purchasing an insurance policy:
- It covers one of your most important assets
Many businesses don’t realize the true importance of data until there is a breach. Data is one of the most important assets that an organization has. When it is damaged or destroyed, it can cost companies thousands to restore and rectify. An insurance policy will help cover these costs.
- Your business is covered for downtime of critical systems
Businesses today depend on computers for a great deal. If your business experiences a system failure due to a data breach, the result will most likely be a crippling of your day-to-day operations. You will have to dedicate your time and resources to the issue.
The problem with this is that your business stands to lose a lot in profits during this period. A hotel, for example, won’t be able to process reservations. Computer viruses, hackers or malicious employees are not covered under traditional interruption policies that businesses invest in. However, insurance against cyber-attacks will ensure your business is covered for the financial loss experienced due to these perils.
- Your business will be covered for liability related to third-party data
Businesses today store a lot of data that often belong to third parties, including suppliers and customers. This information is often submitted to businesses after agreeing to commercial contracts or non-disclosure agreements. If your business experiences a breach in third-party data, you could be held liable.
Consumers today are seeking legal action against businesses that have lost their personal and financial information. This often results in great losses to companies. Insurance can cover you against the risk of holding this data.
- Cover against penalties for lost credit card data
Losing credit card data can result in hefty penalties against your business. You could be held liable for costs related to forensic investigations, the reissuance of credit cards to consumers as well as fraud connected to stolen data. This can cost your business hundreds of thousands of dollars if you’re a small retailer and millions if you’re a big business. Insurance can help to protect your business and its assets against these expenses.
Don’t wait for an incident in order to take action. Be proactive by investing in cyber security insurance to protect every aspect of your business.
