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In today's digital world, small businesses are thriving by using technology to streamline operations, connect with customers, and expand their market reach. However, this digital advancement also comes with new challenges, and one of the most significant threats is cybercrime. As the frequency and sophistication of cyberattacks increase, small businesses are vulnerable to data breaches, ransomware attacks, and other malicious activities. To protect your business against these threats, it's essential to understand and invest in Cyber Liability Insurance. This insurance aims to cover the financial losses that occur due to cyber incidents. In this blog post, we'll explain what Cyber Liability Insurance is, why it's essential for small businesses, the coverage it provides, and any potential gaps in coverage you should be aware of.
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What Is Cyber Liability Insurance?
Cyber liability insurance is a type of insurance designed for small businesses that provides coverage for cyber threats or breaches affecting computer systems and data. This can include the exposure of sensitive customer information, such as credit card numbers, Social Security numbers, account numbers, health records, and driver’s license numbers. Cyber liability insurance is also referred to as cybersecurity insurance or cyber risk insurance.
Why Small Businesses Need Cyber Liability Insurance?
As a small business owner, you should be aware that hackers can target your business' computers to access personally identifiable information (PII) or personal health information (PHI) that you may store on them. Therefore, it is important to protect your business with data breaches or cyber liability insurance, which can help you respond quickly in case of a cyber-attack or data breach.
These coverages can be helpful if your business' computers get infected with a virus that exposes private and sensitive information if your customers or patients sue you after losing their PII or PHI, or if you need to address high public relations costs to protect your business' reputation after a data breach.
To determine whether your business needs data breach or cyber liability insurance, you should ask yourself the following questions:
Does your business collect, store, send, or receive PII or PHI?
Does your industry have specific rules about customer information, such as in healthcare, education, or finance?
Do you have a plan in place to respond to a cyber attack if it were to happen today?
What Does Cyber Liability Insurance Cover?
Cyber liability insurance is a type of insurance that covers the expenses and damages incurred by a business due to a cyber security breach. This includes the costs of investigative services, data recovery, and identity recovery. Data recovery covers the expenses related to recovering data lost due to a breach, while identity recovery covers the costs needed to regain control of personal identity information after identity theft.
Apart from this, cyber liability insurance also covers damages that affect a business's customers or partners due to a cyberattack. These damages include legal fees, settlement costs, and customer notifications.
According to Bryan Smith, the vice president of product management at The Hartford, cyber liability insurance provides coverage for various cyber threat scenarios, such as suspected network intrusions, cyber extortion threats, data breaches, network or security wrongful acts, denial of service, and network outage situations.
Cyber liability insurance can pay for customer and employee lawsuits due to privacy breaches
Lost income due to network outages
Public relations costs to restore a company's reputation after a data breach
Ransom payments made to regain data access
Regulatory fines.
What is not covered by Cyber Liability Insurance?
It is essential to understand that insurance policies may not cover every type of claim. To create a comprehensive protection plan for your business, you may require additional types of business insurance, such as:
General liability insurance: This coverage helps to pay for claims when your business is responsible for causing property damage or bodily injury.
Commercial property insurance: This coverage helps to protect your business's owned or rented physical location and equipment.
Employment practices liability insurance: This coverage helps to pay for employee claims of harassment, discrimination, or wrongful termination.
Professional liability insurance: This coverage helps to pay for claims of mistakes or omissions in your professional business services.
How Much Is Cyber Liability Insurance For Small Businesses in Connecticut?
According to Insureon “The cost of cyber liability insurance depends on your policy limits and how much sensitive data your company handles. Small businesses pay about $145 per month for this policy. Small businesses pay an average premium of $145 per month, or about $1,740 annually, for cyber insurance. Their figures are sourced from the median cost of policies purchased by Insureon customers from leading insurance companies. The median offers a better estimate of what your business is likely to pay because it excludes outlier high and low premiums.
In the current digital era, small businesses rely on technology to succeed. Unfortunately, cyber threats are a constant danger that can cause significant damage. That's where Cyber Liability Insurance comes in - it acts as a crucial shield that covers data breaches and ransomware attacks. This type of insurance can help with financial losses, data and identity recovery, legal fees, and PR costs. However, keep in mind that there may be gaps in coverage, so businesses must be aware and consider additional insurance for comprehensive protection. In Connecticut, the average monthly cost of Cyber Liability Insurance is $145, making it a necessary investment for small businesses that want to navigate the dynamic cyber landscape safely.
Secure your small business against cyber threats today! Don't let any vulnerabilities compromise your success. Request a free quote for Cyber Liability Insurance now and fortify your digital defenses. Safeguard your data, protect your finances, and ensure uninterrupted growth. Call us to get started, because proactive protection is the key to a thriving digital future for your business!