Nowadays no one is safe from a cyber security breach; just a few years ago, it was only a concern for major companies and government agencies. Since the media only reports on high profile breaches, you may not realize the risk has grown for small companies, which are now the preferred targets for hackers. Small and medium-sized businesses suffered more than half of all attacks in an industry report from 2013. A cyber security breach is expensive to clean up and manage, and smaller companies have fewer resources to cover costs like legal fees and customer notification. Cyber liability insurance coverage, as a result, is becoming a common and more necessary policy.
Here are some areas that many of these policies cover:
- Customer Notification – Notification is typically a sent through the mail, and if you have a large customer base, that can be a sizeable expense. Usually you will also need to provide service assistance such as credit monitoring or identity theft protection.
- Legal costs – Cyber crime has evolved so quickly over the last few years that it is difficult to measure the many legal ramifications of a cyber security incident. At present, class action lawsuits from customers and shareholders are the most likely.
- Data Restoration – You want to keep your company running as smoothly as possible after a breach; critical data may need to be recovered or be given additional protection.
- Disruption of Operation – You will likely experience lost income is there is a denial-of-service attack. Your customers will not be able to complete transactions, and you will lose potential customers during downtime.
The safest course of action for any business is to assume that a cyber breach will occur, sooner or later. Preparing in advance for such an event with suitable cyber liability insurance coverage is a smart way to protect your company.