As a business owners, why should you care about cyber liability insurance? Cyber-crimes are on the rise. If you digitally store any confidential client information, such as social security numbers, credit card information or other personal sensitive information, you are at risk of being hacked by someone looking to steal that information. You are responsible for the protection of that information.
Here are some frightening statistics.
- 74% of small and mid-size businesses were targeted for cybercrime
- 60% of small businesses will close within 6 months of being victimized by cybercrime
- 51% increase in security breaches from 2015 to 2016
- 29% of data breaches happen from a laptop being lost or stolen
So why do 60% of small business close within 6 months of a cybercrime? It is because the costs associated with the crime are so substantial most small businesses cannot stay afloat. Insurance is a risk transfer tool. By purchasing cyber liability insurance you transfer the risk from your small business to the insurance company.
Here is what cyber liability can cover for you:
First-Party Privacy Breach Expense: Pays your costs for notifications, monitoring, investigations and crisis management expenses.
Third-Party Cyber Liability Coverage: Pays your liability to others due to a data breach within your business.
Regulatory Proceeding Claim Expense: Pays fines and penalties assessed against you as a result of investigations into a potential data breach or violation of privacy laws.
First-Party Business Interruption: Pays your business income loss and extra expenses sustained during the reconstruction period due to a cyber or data breach liability loss.
Don’t make the mistake of thinking you are already covered. The fact is, most general liability policies provide little to no protection for cyber-crimes. This coverage must either be purchased as a separate policy or at the very least endorsed onto the commercial general liability policy. At best insurance policies that do offer some cyber liability coverage offer a minimum amount of $5000 to $10,000 of coverage. This is a fraction of what the costs could be to your business should you be a victim of cybercrime. The cost to notify the person whose information was stolen or even possibly stolen and the cost to monitor their credit reports for fraud can costs tens of thousands even hundreds of thousands.
Call Insurance Professionals of Arizona to have your policy reviewed or to purchase a cyber liability insurance policy.