Is Cyber Liability Insurance Right for You?
The Digital Age
As any savvy business owner knows, purchasing general and professional liability insurance is simply smart. But in today's hyper-connected digital world, in which phishing emails, misplaced laptops, or weak passwords can result in a massive data breach, it's clear the rules are changing.
Even though the number of annual data breaches is on the rise, the need to combat cyber thieves is hardly new. In 2021, a leaked Facebook database was discovered containing personal information from 553 million accounts. And how can anyone forget the 2017 Equifax hack in which over 147 million U.S. consumers' full names, Social Security numbers, birth dates, addresses, and driver license numbers were stolen.1,2
Despite these high profile hacks, many small and medium-sized business (SMB) owners remain unprotected in the event of a network intrusion. A staggering 43% of SMBs do not have a cybersecurity plan in place.3
Recovering From an Intrusion
Even though Cyber Liability insurance won't stop data thieves from trying to penetrate digital security protocols, there are plenty of reasons SMBs might want to invest in cyber liability:
- Cost: Data breaches cost SMB's an average of $175,000 per occurance.4
- Frequency: Breaches happen all the time. Almost two-thirds of SMBs have experienced a data breach in the past twelve months.5
- Impact: Sixty percent of small businesses close within six months of an attack.6
- Risk management: Preparing for every possibility is just smart. Cyber Liability insurance is one more way to keep your business safe.
It's About More Than Money
Businesses that purchase Cyber Liability insurance do so because they understand the long-term financial and reputational costs associated with a data breach or hack. A loss of consumer confidence can have an acute, lasting impact that many small businesses often can’t overcome. At the end of the day, even though our world is more connected than ever, a small businesses’ digital reputation is a driving factor in consumer loyalty.
1. SecurityMagazine.com, 2021
2. Reuters.com, 2021
3. Cybersecurity-Magazine.com, 2021
4. InsuranceJournal.com, 2021
5. InsuranceJournal.com, 2021
6. SecurityMagazine.com, 2021