7 Reasons Why Your Business Needs Cyber Insurance

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7 Reasons Why Your Business Needs Cyber Insurance

A recent survey shows that US businesses are likely to pay a ransom fee to get their data back when they have suffered a cyber attack. Currently, 71% of those targeted paid up. Cyber liability insurance can protect your business against the expenses associated with a data breach — and covers some risks you might not have even thought of.

Cybersecurity should not get overlooked, even though it may seem like these threats will never occur in your business. That’s why the team of experts at Imagineering and Spectrum Insurance Group have put together 7 Reasons Why Your Business Needs Cyber Insurance:

1. The Odds Are Not In Your Favor

100% of businesses should have cybersecurity measures in place. The odds of winning the Mega Millions Jackpot are 1 in 302,575,350; the odds of a cyber event happening at your business is 7.5 out of 10. From computers and servers, to point of sale systems, your data needs to be protected.

2. On-Premise Or In the Cloud, Your Data Is At Risk

A data breach that originates in your system makes your business vulnerable. Cloud computing provides security to your data and applications that are stored there, but if the breach originates in your system, the Cloud won’t help protect you. Additionally, your backups from the time the breach originated will also be compromised, costing you thousands to restore.

3. Claims are Expensive

Half of all cybercrime victims spent more than $50,000 responding to an attack. The most common cyber attack — ransomware — is a type of malware that threatens or blocks your data unless a ransom is paid (ransom can be upwards of $150,000 in Bitcoin). Not to mention legal fees, accounting and IT costs, as well as reputational management and business interruption (interruptions last 21 days on average).

4. Cybercrime is Big Business

Cybercrime is run by highly organized groups. The outdated thinking of “it won’t happen to me” has changed to “it’s only a matter of time” since these attackers know how to identify the vulnerable and take advantage of the lack of cybersecurity measures put into place.

5. Small Businesses are At Risk

Small businesses are often targeted more than large businesses because the resources are lacking. But cybersecurity doesn’t have to be expensive. For instance, Multi-Factor Authentication (MFA) is an additional layer of security that you can add on top of your typical username and password that uses an additional verification method before logging in to important accounts. In 2019, 94% of victims did not have this in place.

6. Coverage is Relatively Cheap

Cyber liability insurance is extremely cheap relative to the coverage it provides. Benefits of a Cyber Insurance Program can include:

  • Protections from lost income during a breach
  • An online portal to help with any questions you have
  • Legal consultation to form a Breach Response Program
  • Post-event protection for your clients: notification, and credit/identity monitoring expense
  • Public relations to manage your reputation after a breach

7. Coverage is Wide

Key types of attacks covered include ransomware, social engineering, bricking (destroys computers and mobile phones), invoice manipulation, and customer’s hacked records and credit cards. All equally as dangerous and damaging to your reputation and bottom line.

“Cyberattacks now occur every 20 seconds,” says Brian Christ, Commercial Insurance Advisor with Spectrum Insurance. “In addition to protecting your business with firewalls and antivirus software from Imagineering, obtaining cyber liability insurance can also help reduce potential risks and costs associated with a cyber attack. Some commercial policies even cover loss of business while your system is compromised or unavailable.”

The risks of not having a cyber liability insurance policy greatly outweigh the costs associated with having a policy for your business. Think about the financial loss, recovery costs, lost productivity, business interruption, reputational harm, and legal repercussions if your business encounters a cyber attack.

Don’t leave this important step in the hands of one single technology resource or insurance agent. Engage local professionals, like Imagineering and Spectrum Insurance Group, to secure your business and help plan strategically for the long term.

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