Being online is very important for any business to succeed. You can attract potential customers, generate sales, or advertise your products or services on the internet. Therefore, it is no surprise that any business, small or large, will want to maintain a presence online. But being online does come with potential risks. Cyber attacks are very common these days, and they don’t just affect large-scale businesses. Small and Medium-Sized businesses are also frequently targeted by cyber attacks.

A cyber attack can get your employees locked out of their systems, leading to productivity grinding to a halt. In addition to that, you can potentially end up paying money to settle claims if your customer’s data gets leaked.
And that is just one of the reasons why having cyber insurance is crucial for any small or medium-sized business.

Let’s take a look at the top 5 reasons why small and medium-sized businesses need to invest in cyber insurance.

1. Cyber Insurance can make a difference

Cyber insurance can protect your company from liabilities, it covers the losses from damage to IT systems, and Cyber insurance can also provide crucial assistance with the management of the incident itself.

For a small to medium-sized business, an event like a cyber attack can really prove to be devastating. Smaller businesses rarely have the manpower or resources to handle an emergency like a cyber attack without it affecting all other aspects of the business as well. In such a scenario, a Cyber insurance plan that not only protects the company from any liabilities but also covers the losses and can prove to be a lifesaver.

Cyber Insurance companies are much more equipped and ready to deal with any kind of cyber attack and will also be able to check your system beforehand to let you know if it is vulnerable to potential attackers.

2. Cyber Attacks are on the rise

According to Accenture, there has been a 125% increase in cyber attack incidents on a year-to-year basis. Industries like Consumer Goods, Finance and Travel were affected primarily by these cyber attacks. But that does not mean that the attacks were just limited to these industries. The increase in attacks was observed throughout all industries and geographical locations. And there is no sign of it slowing down.

The reason for this is simple, Cyber attacks are incredibly effective, and over time, as these attacks become more frequent, having a Cyber Insurance policy will have to be a must for any business to operate normally.

You can read the article posted by Accenture in detail here.

3. Standard Business Insurance plans and endorsements do not cover Cyber attacks

You may already have an insurance plan for your business, but you should keep in mind that the majority of business insurance plans do not cover cyber-attacks. Even a cyber endorsement (on a Business Owner Policy or other) will not provide the robust protection and value of a stand alone cyber liability policy.

Only a dedicated stand alode cyber insurance plan can ensure that your business remains secure in the event of a cyber attack. In addition to that, Cyber insurance plans also provide real-time assistance to their clients so that they can prevent attacks from taking place.

Cyber Insurance companies will be able to test your system for you and inform you if there is a weakness in your system. Once they are able to identify a potential weakness, they can assist in removing it so that your system can be as secure as possible and also provide Cyber training to your employees and significantly reduce your business’ Cyber exposure.

4. A Cyber Attack can mean the end of your business

A report by the U.S. National Cyber Security Alliance found that 60% of businesses that faced a cyber attack had to close down as a direct result of the cyber attack.

A cyber attack not only disrupts your business, but it also severely damages the reputation of any business. Depending on the type of breach, a business may be liable to lawsuits if their customer data is compromised.

For a business that does not have a lot of resources, these threats can prove to be the end. This is why a good Cyber Insurance plan will not only cover the costs for the business interruption but also cover liability costs that may occur as a result of a cyber-attack.

5. Data is extremely important

As a business owner you know that your data is extremely important for the functioning of your business. If your data were to get compromised or lost entirely, it would become almost impossible to get your business back on its feet again.

But all that important data can be lost just because of a single cyber-attack. As a business, it is vital to minimize risk wherever possible.

The best way to protect your important data is to get an effective cyber insurance plan that not only protects you from attacks but also prevents them from occurring in the first place.

Summary

Cyber Insurance not only protects your business from the damage caused as a result of a cyberattack, but it can also help cover the liabilities.
This is why cyber insurance is extremely important for your small or medium business. It allows you to focus on the important aspects of growing your business instead of having to worry about potential cyber-attacks.