Big names have been in the news for being the victim of cyber hacking and data breaches – the IRS, the U.S. government office of Personnel Management, VTech, and, of course, Ashley Madison. While these stories make national news and impact millions of people, small businesses are just as likely to be hacked. Data experts say breaches are inevitable, regardless of the size of your company.
Even scarier is that a breach can go on for months before anyone figures out the problem. That’s a long time for your customer’s or employee’s information to be in the hands of hackers.
What Does a Data Breach Look Like?
When sensitive data is compromised, the names of your customers and employees, contact information, social security numbers, and credit card numbers used for purchases are all at risk of falling into the wrong hands. The information can be taken in a variety of ways:
- Business website
- Mobile device, tablets, iPads
- Laptops, computers, USB devices
Anywhere data is stored, or an internet connection is made, is at risk of a breach.
What are the Costs of a Data Breach?
When a cyber attack or data breach occurs, there are a lot of costs that will add up fast, regardless of the size of your small business.
- Liability for losing third party data
- Penalties from Merchant Services for losing credit card data
- Expenses of foreign investigations
- Cost of notifying everyone affected
- Regulatory fines and penalties that may be incurred
- Cost to monitor customers’ credit for a specified amount of time, usually a year
- Lawsuits, settlements, legal fees, and court costs from those affected
- Business interruption while you deal with the problem
- Advertising or the PR firm hired to help you repair damage to your brand
No matter how common a data breach may be, it’s not a cheap problem to have. Thankfully, cyber liability insurance can help cover these expenses.
What Does Cyber Liability Insurance Cover?
Depending on the policy you select, and the type of breach you experience, a cyber liability insurance policy can cover all of the expenses listed here. You pay your premiums and any deductibles, and the rest is taken care of for you.
Cyber liability insurance covers specific breaches:
- 1st and 3rd party risks that come with doing business online
- Privacy issues
- Intellectual property infringement on the internet
- Viruses that pass through internet connections
- Mobile devices, laptops, USB drives, iPads, tablets, and other devices that may be stolen or lost
Wherever your data is stored and can be shared, it can be protected with a cyber liability insurance policy. Your standard business liability or other insurance won’t cover you when you experience a data breach. In today’s world, where we’re all connected to the internet and hackers work overtime to get the information they want, it makes sense to seriously consider a cyber liability insurance policy for your business.