Why Is Cyber Insurance Important for Small Businesses?
The world has seen a sudden and drastic increase in the number of cyber-attacks in recent years. Between 2017 and 2021, cybercrime complaints to the FBI jumped from 301,580 to more than 847,000.
With cyber-attacks not only on the rise but also getting more advanced with each passing year, it can be important to help protect yourself and your business.
Small businesses, in particular, may be at risk of damage from cyber-attacks. Unlike larger enterprises that have big budgets and the IT staff necessary for handling advanced cybersecurity, small businesses are often left unprotected. This can make them more susceptible to financial losses caused by cyber-attacks.
If you want to learn how to help protect your small business from cyber-attacks and data breaches, keep reading. We're breaking down what you should know about the risk, and how cyber insurance can help.
Why Cyber Attacks are Dangerous for Small Businesses
Cyber-attacks can be devastating for any business. They can lead to a direct loss of profits. Often, they lead to an indirect loss, too, as business operations are slowed or even shut down to deal with the attack. If customer information is compromised, a business's reputation can be severely damaged.
On top of that, dealing with the aftermath of the attack can be costly and stressful for managers, employees, and business owners.
A cyber-attack can damage any type of business. But small businesses may be particularly at risk.
One reason for this is that many small businesses aren't preparing themselves for the threat of the attack. Some fail to do so because they believe it isn't in their budget. Others don't because they think that they are too small to be a target. Either way, this can be a big mistake.
How Cyber Insurance Can Help
Helping to protect your small business from cyber-attacks might be more affordable than you think. Obtaining coverage upfront to help protect yourself against attacks can also pay off big time down the line.
Making cyber security a priority can be important. However, there's no way to completely prevent an attack. That's why, in addition to helping protect yourself against attacks, you should also acquire protection for your business in case an attack does occur.
One of the best ways to help protect your business from the financial aspect of a cyber-attack is through cyber insurance.
What is Cyber Insurance?
Cyber insurance is a type of coverage designed specifically to help protect businesses against computer-related crimes and losses. This includes data breaches, network security attacks, and other types of tech-related attacks and risks.
Sometimes known as cyber liability insurance or cyber risk insurance, coverage for cyber-attacks kicks in after an attack has occurred. It can cover a variety of related costs, including:
- Costs related to responding to the attack
- Fees to investigate the source of the attack
- Expenses for notifying customers
- Expenses for notifying other impacted parties, like vendors or suppliers
In the first half of 2022, the cost of a claim following a cyber-attack on a small business increased 58 percent from the first half of 2021. The average claim by small businesses topped $139,000.
This is the average insurance claim filed. Without cyber insurance, your business could be left paying similar amounts out of pocket.
Getting Cyber Insurance for Your Small Business
Cyber coverage can be one of the best ways to help protect your business from the impacts of a cyber-attack. Getting cyber insurance can be easier than you think.
One way to get cyber insurance is to purchase it through BOP insurance. BOP, or a Business Owners Policy, is a type of policy that includes multiple different types of coverages that commercial businesses might need.
BOP coverage includes cyber insurance, as well as general liability insurance and property insurance.
General liability insurance helps to protect your business in case a third-party is injured on your property. This insurance can cover their medical costs and protect you against injury claims. Property insurance helps to protect your business and physical assets. This includes protection in the event of a fire, theft, or vandalism.
Both types of coverage can be essential for small businesses. By purchasing a BOP policy, you'll not only get these protections but cyber risk coverage as well. This can be a convenient way for businesses to not only help protect themselves from the most common risks, but it can also be a great way to potentially save some time versus finding separate policies.
Help Protect Your Small Business from Cyber Attacks
Just a few decades ago, small businesses needed to only worry about protecting themselves from injuries on their property, disasters or theft that could damage their business, and lawsuits.
Today, cyber-attacks are a very real threat to businesses. That's why it can be just as important to help protect your small business from these types of attacks, as it is to help protect it from a fire or flood.
Unfortunately, cybercriminals are getting smarter. It can be more challenging than ever before to help protect yourself from every type of attack. This can be especially true as the types of attacks continue to evolve.
Luckily, cyber coverage can make it easier to help ensure that your small business can be protected if an attack does occur. PolicySweet® strives to help protect your small business. Start your free quote today or reach out to us to learn more about how we can help keep your small business safe.