Business owners rely on a multitude of systems and devices to streamline tasks and make their lives easier. Although technology is often a business’s greatest ally, it can also be one of its biggest vulnerabilities.
Computers and other business devices are often an easy entry point for cyber criminals to access confidential data. With criminals continually enhancing their methods, it’s best to be prepared and have proper security measures in place to keep your business’s data and reputation safe. One such measure should be having cyber liability insurance.
Cyber liability insurance provides financial coverage for businesses who experience a data breach or other related cyber incidents. If your business stores sensitive data of any kind, you may want to consider purchasing cyber liability insurance as an extra layer of protection in case an attack or breach should occur. There are a few other essential benefits to having cyber liability insurance in addition to protecting against cyber risks. Following are five ways cyber liability insurance can provide your business with peace of mind.
Cyber incidents can come with detrimental costs for an organization. According to Statista, the average cost of a data breach for businesses in the U.S. in 2023 is about $9.48 million. Without any financial assistance, this amount could have an immense impact on smaller to mid-size companies. Cyber liability insurance provides financial support for various costs associated with a cyberattack, such as legal fees, recovery plans, crisis communications, credit monitoring services, etc. It provides a business with the resources and funding for the expertise needed to navigate through the incident without the business having to incur massive costs.
Malware, or ransomware, is one of the most harmful types of cyberattacks and has grown in popularity among criminals in recent years. That’s because it’s extremely effective — not only do criminals gain access to a business’s financials but they’re often given a significant amount of money in return for not going public with the confidential data. Cyber liability insurance helps defend against these attacks by allowing businesses to earn back the costs they may have used to pay off the criminal who installed the malware.
If a business should fall victim to a cyberattack and the cause is unclear, an investigation should be launched to accurately identify the source. Cyber insurance supports forensic investigations by providing funding for most — if not all — costs associated with them. Once the source or vulnerability is determined, it’s crucial for businesses to implement a solution, whether it’s through employee training or stronger network security, to further prevent future attacks.
Keeping you Compliant
With privacy and data security, many businesses have regulations and laws they must adhere to in order to remain compliant. Cyber liability insurance can help businesses stay compliant throughout the process of recovering from a cyber incident by providing funds for regulatory audits, assessments and fees/penalties that may be imposed as a result of an attack.
Clearing Your Reputation
A business’s reputation and image hold immense value in the eyes of its consumers. When a data breach occurs and client data is involved, it can create a deep sense of distrust and stress, causing the client to sometimes sever business relations. With cyber liability insurance, there’s often coverage for rebuilding a business’s reputation after an incident. Whether that’s assisting with PR costs or client communication professionals, there are options available that can help a business restore its brand and gain back consumer trust.
Cyber liability insurance can have many advantages for a business when it comes to protecting against cyber criminals. However, it’s crucial to remember that an insurance policy isn’t a set-it-and-forget-it solution for preventing cyber incidents. It’s best to pair an insurance policy with various other security measures, such as routine employee training and a strong incident response plan. It’s also important to read the vendor policy in its entirety before purchasing any insurance in order to ensure it covers everything you’re seeking for your business. Some plans are more flexible than others, so researching options and doing your due diligence beforehand can save you a lot of potential grief down the road.
At Creative Planning Business Services, we help clients maximize their security posture so that they can focus on running their business without fear of cyber risks. We partner with clients to create information security plans that align with their business needs and assess their current security practices so that they can improve for the future. If you’d like to learn more about our information security services, please request a meeting. We’ll be happy to discuss them further.