Cyberattacks have become an all-too-common problem affecting businesses of all sorts worldwide. A high percentage (71% of U.S. businesses) have paid the ransom when suffering an attack, resulting in an average payment of $17,959 for companies who responded to ransomware attacks within a 12-month timeframe. Cybersecurity insurance can help protect your business from succumbing to large ransomware payouts and provide you with coverage for cyber exposure.
Who Needs Cybersecurity Insurance?
Businesses, both large and small, have a system for managing their client information, including sensitive data such as personal and credit card data. Typically, companies store this information nearly exclusively in electronic form. While electronically storing credit card information makes recurring payments easier for businesses, it can also make them a target for cyberattacks. This is why investing in cybersecurity and cybersecurity insurance is critical.
While cybersecurity insurance is beneficial for all businesses, it may not be available to all. To obtain this type of liability insurance, you must prove you have established strong security measures within your electronic infrastructure and that systems are on the most up-to-date versions. If you are not sure about the level of your cybersecurity, it’s imperative to participate in a vulnerability or cybersecurity gap assessment. These assessments can help identify vulnerabilities and risk that can leave your business vulnerable.
Why You Should Have It
Cybersecurity insurance can help protect your business in more ways than you realize. Below are just five reasons to consider buying protection:
- It is affordable: You may think another insurance plan will be too costly, but when you look at the potential protection it provides, you will see just how inexpensive it is in comparison.
- General liability may not cover you: Your general liability insurance plan typically stops at anything involving cyber-related crimes. You will need cyber-specific insurance to cover those potential losses.
- Cybercrime is everywhere: Cyberattacks happen every day to every type of business. The reality of it happening to your company is very real, and you must be prepared.
- Small businesses are a target: Cybercriminals often target small businesses due to what are assumed to be their less secure databases.
- Claims are expensive: A ransomware attack occurs when your data is blocked or threatened unless you pay a high ransom. These attacks are the most common, and the ransom demands could cost upwards of $150,000 in Bitcoin on top of the possible legal fees and costs to recover any data or information lost.
What Is the Risk of Not Having It?
Cyberattacks result in financial loss, downtime for your business, recovery costs, compromised data, and potential legal repercussions. Each can be detrimental to your company in the short and long-term. Cybersecurity insurance can protect your business from suffering any more damage than is necessary. Your business could suffer an attack at some point, so having proper liability insurance and cybersecurity measures in place could be the key to your company surviving such a hit. Learn more about how you can stay better protected in our guide to obtaining cybersecurity insurance or contact a TPx expert.