Why Buy Cyber Insurance?
In today’s digital world, businesses of all sizes are vulnerable to cyberattacks. In fact, studies have shown that global cyberattacks increased by a whopping 38% in 2022. You may think your small business has no need for cyber insurance, but 43% of all cyberattacks are aimed at small businesses (SMBs). Cyber insurance is a critical tool that can help SMBs protect themselves from the financial and reputational damage caused by cyber incidents.
“A breach won’t happen to us, we are 100% secure, we’ve never been hacked.”
No company that uses technology is 100% secure but laying the groundwork with proper cybersecurity measures and partnering with cyber insurance can help! Cyber insurance covers many events you may not think about in your day-to-day internet browsing. This can include ransomware, phishing attacks, and fraudulent wire transfers, as well as the many data breaches caused by unintentional human error.
What is Cyber Insurance?
Cyber insurance is a type of insurance policy that provides protection to businesses against losses resulting from cyberattacks and data breaches. Many studies show the majority of breaches are a result of human error. In truth, 95% of all data breaches are caused by an employee mistake. Cyber insurance can help pay the breach costs from an accident like a financial controller forgetting to password protect a spreadsheet or a salesperson forgetting their company laptop in an Uber.
“95% of all data breaches are caused by an employee mistake. *”
Unlike the traditional business insurance, general liability, which provides coverage for bodily injury and property damage claims, cyber insurance is primarily designed to provide coverage for a financial loss. General liability (GL) insurance is nearly useless when it comes to data breaches. This is why all 50 states have enacted legislation requiring private or governmental entities to notify individuals of security breaches. Cyber insurance can help pay fines and penalties.
Why do SMBs Need Cyber Insurance?
“43% of all cyberattacks are aimed at small businesses (SMBs). *”
1. Increased Risk:
Small to medium-sized businesses are often the prime targets for cyberattacks. These businesses typically lack the same level of cybersecurity resources and expertise as larger organizations, making them more vulnerable to cyber threats.
2. Financial Losses:
A cyberattack can result in significant financial losses for SMBs. The costs associated with remediation, business interruption, and reputational damage can quickly add up, putting SMBs at risk of bankruptcy or closure. According to research, 60% of SMBs do not survive beyond 6 months after a data breach or cyberattack.
3. Data Breaches:
SMBs collect and store large amounts of sensitive customer data, including personal and financial information. In the event of a data breach, the business could be held liable for damages resulting from the loss of this data.
4. Regulatory Compliance:
Many industries are subject to regulations that require them to protect sensitive data. Failing to comply with these regulations can result in significant penalties, fines, and legal fees. Currently, all 50 states require immediate notification of security breaches that involve personal identification.
5. Reputation Damage:
A cyberattack can damage a business’s reputation, leading to lost customers and revenue. Cyber insurance can help mitigate this damage by covering the costs associated with public relations and communications efforts aimed at restoring the business’s reputation.
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95% of all data breaches are caused by an employee mistake
43% of all cyberattacks are aimed at small businesses (SMBs)
Every 40 seconds, a business suffers a ransomware attack
“Every 40 seconds, a business suffers a ransomware attack. *“
Cyber insurance is an essential tool for SMBs that want to protect themselves from the financial and reputational damage caused by cyberattacks. Given the increasing frequency and severity of cyber threats, it’s critical that SMBs take steps to protect themselves and their customers from these risks. Cyber insurance helps SMBs with the protection they need to weather the storm and emerge stronger on the other side.
Interesting in learning more about cyber insurance? TREYSTA partners with EHD Insurance, located right here in Central PA. Please visit https://ehdinsurance.com/commercial/cyber-security/ for more information. Or call Brian Mahon at 717-394-5681 ext. 4331.
Protect not only yourself, but your company and employees, from human error that often opens the path to major cybersecurity risks.