Cyber insurance used to only be a product bought by businesses in a few select sectors. Ten years ago, only companies in healthcare, finance, or retail where a lot of personal data was stored, were targeted for cyber attacks. But today, cyber attacks have been more frequent and widespread that almost any business or organization is at risk of a cyber attack.

Average cyber attack costs small businesses over $25,000!

A cyber attack can happen to anyone, anywhere. A cyber attack on a small business is more likely to be damaging and costly than others due to the fact that cyber attacks tend to be better planned and executed compared to cyber attacks on larger companies.

A recent report from Hiscox in mid 2021 revealed that the average financial cost of a cyber attack on small businesses in the US was $25,612.

Cyber insurance can be a cost-effective way for small businesses with limited cyber security operations to protect themselves from cyber attacks. A cyber insurance policy usually covers cyber liability losses due to service interruptions, malicious data breaches and extortion payments made to cybercriminals.

Cyber insurance can help small businesses recover costs that are related to cyber attacks like legal fees, credit monitoring services, cyber extortion payments and cyber liability for third-parties.

A cyber insurance policy can also cover business interruption losses if the cyberattack causes a permanent loss of data or functionality. If the cyber attack can be proven to have a cyber-related cause, cyber insurance can also cover investigation costs and expenses related to cybercrime defense.

What is cyber insurance?

Cyber insurance, also known as cyber risks or data breach coverage, protects against financial loss that results from a variety of cyber incidents. This includes damage due to hacking and viruses as well as the costs associated with regulatory fines following a security breach. So it’s not just about covering technology assets but covers any business expenses resulting from an attack on those assets – all in one policy!

In the event of a cyber attack small businesses owners need to know that cyber insurance is not designed to protect against cyber attacks but rather assistance with the financial losses that are linked to cyber attacks.

Who should be buying cyber insurance?

Any organization can benefit from having this type of protection whether they are small businesses or large corporations because every single company has some form of information stored digitally that could be compromised by hackers who want your personal/financial information which would result in you losing money if there was no way to recover financially from the attack.

Who should not be buying cyber insurance?

There are certain types of companies that probably don’t need to buy cyber insurance because they aren’t at much risk for a security breach or data loss since they do not have customer information, payment card details or any type of intellectual property that could cause financial damage if it was stolen. For example, law firms and engineering companies would benefit from having Cyber Insurance but construction sites are less likely targeted by hackers who want to steal blueprints so there is no reason to purchase this protection for them.

Cyber attacks and data breaches have become so common place that many companies, even if they aren’t targeted by hackers on a regular basis, are still at risk for some sort of loss due to an attack – whether it be financial or personal information. So no matter what type of business you run there is always going to be some exposure which means every company should consider purchasing cyber insurance as part of their protection strategy. Not only does this product protect your assets but also covers any regulatory fines you may incur following a security breach so it isn’t just about protecting IT systems anymore, it protects against potential lawsuits as well.

According to the Cybersecurity and Infrastructure Security Agency (CISA), many cyber attacks today not only demand ransom after taking control of a business’ data but many times they will also threaten to leak or sell the business’ data if the ransom is not paid.

Though it may seem like only large companies are the victims of cyber attacks because the very large attacks are the ones that make the news, in reality any business can be targeted as small as a one-person operation.

In addition to the extortion events, companies can also be at risk of non-malicious cyber breaches like accidental customer data exposure through employee errors. Though these events are not a result of an attack they can leave businesses with liability exposure for which cyber insurance can protect them.
A typical cyber insurance policy provides a number of wide ranging benefits to clients if they ever find themselves in the very stressful situation of being the target of a cyber attack.

Some of these benefits include:

Providing up to a certain dollar amount in coverage for expenses and fees incurred when recovering from a ransomware attack
Covering the cost of crisis management services after an attack
Reimbursing costs associated with hiring professional forensic experts who can investigate what happened and create recommendations on how to prevent future attacks
Covering costs to notify and provide credit monitoring services for all residents whose personal information was breached
Providing liability coverage in the event your business is sued by a client who claims negligence after an attack. This would cover legal fees if necessary or any settlement reached during mediation, arbitration or litigation that may arise from such an incident.

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 business from major risks out there. For more information, please visit us at mindaro.io