Topic: Cyber Liability Insurance for Small Business USA 2021
Cyber Liability Insurance for Small Business USA 2021
What Is Cyber Liability Insurance?
Cyber liability insurance helps cover financial losses due to cyberattacks or other tech-related risks and private investigations or lawsuits following an attack and is mainly recommended for larger businesses. Suppose you face an issue that your system gets hacked, and the hacker locks your computers and starts deleting files while demanding a ransom. In that case, Cyber Liability insurance helps you respond to the cyber-attacks and allows your business to recover lost files and the financial or data losses that occurred during the attack. This insurance also covers financial losses were made as a result of data breaches and other cyber attacks.
Why do Small Businesses Need Cyber Liability Insurance?
As technology usage has drastically high, hackers are free to target personally identifiable information or generally your personal information that you save on your business computers. This is why it is essential to protect your business with cyber liability insurance, which can help you respond very quickly after an incident of data breach or cyberattack. This cyber liability insurance coverage can be beneficial if:
- If your business’ computer contains sensitive and private information, that can cause a significant problem if your computer gets exposed to a malicious virus.
- If you get sued by your customers or patients due to a cyber attack and data breaches, that may lead to personal information and data loss.
- To cover the high cost of public relations caused the business’ reputation to fall due to the data breach.
- To subscribe to cyber liability insurance, first ask yourself if you collect, store or send personal data and information? Secondly, ask yourself if you are an organization that works with rules about customer information? Thirdly ask yourself what you would do if you faced a cyber attack today?
Who Needs Cyber Liability Insurance?
If your network or computer systems are easily hacked into or corrupted by a virus, cyber liability insurance can be pretty essential. A general liability insurance policy or a professional liability policy will contain basic cyber liability coverage that is much needed for your business.
The businesses which store the personal information of employees or customers should have enhanced cyber liability insurance. This data includes anything used to identify a particular individual, like name, date of birth, email addresses, social security number, credit card number, or bank account number.
What Does Cyber Liability Insurance Cover for a Small Business?
Cyber liability coverage can vary widely on the insurance company and the policy you are opting for. There are two types of coverage within a cyber liability policy:
1. First-party Coverage
This coverage is for paying immediate expenses that can incur in the company after a cyber-attack or data breach. This coverage includes:
- The cost of notifying employees and the public
- Any repairing of damaged software or hardware
- Protects the company’s reputation with a marketing and public relations responses
- Covers the business interruption costs and loss of income, during the period of suspension of business operations, due to cyber-attacks.
- Provides extortion money to make peace with a hacker who threatens you to use your data or systems unless you pay them.
2. Third-party Coverage
This coverage is to help the company defend against lawsuits and legal claims that it may impose during a cyber-attack or data breach. This coverage includes:
- Help in claiming privacy lawsuits are claiming saying that you breached the privacy of customers or employees.
- Covering the fines from regulatory bodies that occurred due to a cyber event.
- Covers media liability claims, including copyright infringement, libel, or slander that it may cause due to data breach.
- Cyber Liability Insurance for Small Business USA 2021
How Much Does Cyber Liability Insurance Cost?
Cyber liability insurances can cost as little as $500 per year or as much as $50,000 or more per year. The expense of cyber liability insurance depends on the type of insurance and coverage you are opting for. By looking into the coverage to your business’s needs, you should find a cyber liability policy that fits your budget perfectly. Look out for the factors that affect the cost of cyber liability insurance before deciding which package or policy to choose.
The factors which affect the cost of your cyber liability insurance are:
Coverage limits provided:
If you go for the higher and more complex coverage needs, your policy will be more expensive. For instance, if your company uses multiple servers to store data, you need to subscribe to a costly insurance package.
Access to data:
The more you limit the access to sensitive data, it can help you save tons of money if you are granting data access only to senior employees that could help protect your data and are trustworthy.
Cyber Liability Insurance for Small Business USA 2021 – Security measures:
Using or implementing adequate security measures, such as installing antivirus software or network firewalls or, for instance, regularly updating your passwords, can lower your premiums, thus saving tons of money.
Industry your business belongs to:
If your business operates online, it is likely to face more cyber threats than a business that operates in a physical store. Online Business will be paying correspondingly more than a brick-and-mortar business. Industries like healthcare and accounting store the most sensitive data types, leading them to pay for a higher premium.
Cyber Liability Insurance for Small Business USA 2021 – History of Claims:
Suppose your company has a history of multiple claims against you. In that case, the insurance company will be more likely to charge you a higher premium. Just because your business will need good coverage to provide excellent protection.
Cyber Liability Insurance for Small Business USA 2021
There are tons of ways that a cyber breach can occur. This can be because hackers send in phishing emails to customers to become fake members of your company. If your customer clicks the link on the imposter email, the hackers can steal the personal information of your customers. Or use a virus or ransomware to corrupt your data files.
The only way to truly protect yourself against cyberattacks is by having internal solid safeguards and security measures. So, this concludes the topic for Cyber Liability Insurance for Small Business USA 2021.