It feels like every day another large cyber attack is reported in the media. Of course, these are the larger ones that actually make it into the news. Many of us have also heard from friends or family members of a cyber attack on their small business. Though those unreported attacks may seem small, they are widespread and very distressing for the victims.
In fact, the Radware 2018 Global Application & Network Security Report found that cyber attacks have a significant effect on small and medium-sized businesses. In this survey of respondents from more than 100 countries, nearly half cited a negative impact to their business as a result of an attack. This is true even after only one or two days! Additionally, 32% said they’d been attacked at least once in 2017—and 43% were unsure if they had been targeted by bad actors last year. These statistics show just how important it is for all companies to have strategies in place to protect themselves against cyber risk. Even your neighbors should be thinking about having some kind of plan because hackers don’t discriminate when looking for targets.
You could be next!
All that said, cyber insurance is one of the most important tools in your risk management tool belt. However, it’s not just any old policy you can buy off an internet website. There are many different components and considerations to take into account when building a comprehensive plan. There are also some key terms like “cyber liability” or “data breach costs” which may sound foreign at first but all become clearer through education (that’s where we come in).
Cyber insurance policies come in all shapes and sizes, but there are two main types most small business owners should understand.
- Traditional cyber liability insurance
A policy which covers the costs of legal fees if you’re forced to take someone else to court for an act involving your computer systems (i.e., hacking or data breach).
- A comprehensive risk management strategy bundled into one single plan
This includes not only coverage related to cybersecurity threats, but also other areas like property damage, IT services interruption, expenses associated with third-party liabilities (including regulatory penalties), crisis management support and more!
Businesses both large and small use these policies as a way to prevent cyber attacks from causing massive damage. They also help companies hit by an attack get back on their feet quickly and efficiently, which is better for the company’s bottom line and reputation.
However, financial risk isn’t always the only thing that businesses should worry about, especially those with sensitive customer data or intellectual property they can lose during a breach. In this case, it’s critical to have certain legal protections in place so if something does go wrong you can limit your liability (and potential fines) after the fact.
Understanding cyber liability policy language
There are many different components that go into a comprehensive plan, it is important to know what they mean so as to get the most out of your strategy. The first type of cyber security protection we will discuss is traditional cyber liability and then we’ll look at some other types like business interruption or legal expenses coverage which also fall under this umbrella term “cyber”. This is important because these various types of protections can help businesses better prepare for the worst case scenario in a cyber attack, which is often costly and time-consuming.
Cyber insurance policies come in all shapes and sizes, but there are two main types most small business owners should understand. The first is traditional cyber liability insurance, a policy which covers the costs of legal fees if you’re forced to take someone else to court for an act involving your computer systems (i.e., hacking or data breach).
The second type of cyber insurance can be thought of as a comprehensive risk management strategy bundled into one single plan, this includes not only coverage related to cyber security threats, but also other areas like property damage, IT expenses, or business interruption.
In terms of cyber policy language it is important to know what the following key phrases mean when you review your plan in order to make sure that their coverage will be sufficient if a claim does come in.
- Third Party Liability (including Regulatory Penalties) -customer information was stolen, this clause would cover any fines associated with HIPAA regulations for example
- Crisis Management Support – We can provide support during an attack helping to contain the damage before operations are fully restored.
At Mindaro, we are working hard to address all the needs of small businesses security by partnering with top tear carriers, providing low cost, easy and understandable insurance policies that will help protect a businesses from major risks out there. For more information, please visit us at mindaro.io