Data breaches are no joke. Reports say that small business owners who do not have cyber insurance end up paying an average of $50,000 for the claims settlement. This is enough to make any small business, or even medium-sized enterprise, fold.
If the financial losses weren't bad enough, note that even one cyberattack is enough to make a company's public relations plummet. The same reports mentioned above state that 30% of customers wouldn't want to work with a business prone to data breach attacks and have a poor data recovery process.
Is general liability enough or should your small business get cyber liability insurance? At Assured Standard, we have multiple guides and reviews about the insurance market and which options provide the best protection against business risks. Check out the rest of our categories!
One of the biggest disadvantages of technological advancements is that crooks can use these for their criminal activities. That's why cyber risks are at an all-time high.
Fortunately, there are plenty of insurers who provide cyber liability protection. Whether you run a small business or own a large company, there's a cyber insurance company that's willing to provide coverage and protection against cyber risk.
Some of the best insurers on the market include:
Our top insurance provider is AmTrust Financial. They have an easy application process that's easy to qualify for, especially with limits below $100,000. Plus, unlike other insurers, PCI fines and online/offline media content are covered by cyber insurance plans of AmTrust Financial.
AIG is well-known in the cyber insurance market backed by 100 years of experience. Apart from their extensive insurance policy coverages, they also have dedicated agents willing to assess your business' specific insurance needs and demands.
What sets CoverWallet apart from any other cyber insurance company on the market is its streamlined claims assessment system. They have an online platform for policy owners to file reported claims 24/7.
The Doctors Company is an insurance company spearheaded by licensed physicians and medical professionals. They focus solely on providing insurance protection, claims assessment, and risk management to clinics and hospitals, among others.
The best option for retail merchants is Travelers. They provide insurance liability coverage for merchants of all sizes, from small pop-up shops to large retail stores.
HSB offers a wide range of insurance business policies, but what sets them apart is their coverage package for law firms. They focus on the following claims resulting from a data breach: identity theft, employment practice liability, errors and omissions, data and cyber risk, and insurance and reinsurance coverage.
Small companies, startups, and nonprofit organizations short on funds can try CyberPolicy. They can connect you to multiple insurance policies and even provide customized, accurate quotes. From there, select the most cost-efficient option.
For clients having trouble getting coverage because of the nature of their business, try XL Catlin. They are a versatile insurance provider that offers a wide range of products to different businesses coming from various trades and industries.
Businesses that have overseas sites or serve clients globally can try Beazley. They have a global server that caters to business clients of all sizes coming in from various regions and countries.
If you want to prevent cyber liability issues in the first place, reach out to Liberty Manual. Unlike other insurers, they don't just provide coverage following data breach damages, but rather, they also have helpful, industry-specific resources to help prevent hackers from hijacking your system and compromising the security of stored PII.
A cyber insurance policy covers all the fees and charges following a data breach. A data breach is defined as the leaking of personally identifiable information (PII) such as:
-Social security numbers
-Credit card numbers
-Account numbers
-Driver's license numbers
-Health records
-Other sensitive customer information
Apart from the legal fees, you can also have the insurance cover the following:
-Data recovery and restoration
-Computer system repair (service attacks on computer systems can be very damaging)
-Company reputation management
-Credit monitoring and review (not state-required, but great for reputation management)
-Fees to reach out and inform customers of data compromise (state-required)
Businesses and establishments that store the personally identifiable information (PII) of their clients, customers, or patients need to have cyber insurance. These include law firms, clinics, retail stores that do financing, and financial institutions.
Threats of a security breach leaking this sensitive information are never fully gone, no matter how skilled your data breach prevention team is. And if your cyber security is ever compromised, a cyber insurance policy can drastically reduce the possible monetary damages to your business.
Meanwhile, small businesses that do not store PII but are at risk of being held liable for data breaches can settle for general liability insurance.
A study by Advisor Smith shows that the average cost of cyber liability insurance across 40+ different cyber insurance companies is $1,500+ for a 1 million coverage. Of course, bear in mind that the actual rates you pay will vary based on the coverage needs of your business and how extensive you want your network security to be.
Businesses with no cyber liability coverage may end up having to pay upward of $50,000 to settle the damages of a data breach.
Cybersecurity insurance premiums are pricey, but they pale in comparison to the tens of thousands of dollars' worth of dues your business will have to shoulder following a data breach.
Fees include the settlement charges, attorney fees, and even public relations costs—which are costs to maintain a good business reputation. There are also the credit monitoring fees your public relations firm might charge after all the claims are settled.
If you do not have the proper business insurance coverage, not only will your business be at risk of shutting down, but smaller companies with not much available funds might even go as far as to file for bankruptcy. That's why it's essential for all businesses and companies, no matter how small or big they are, to have the necessary cyber insurance protection if they store PII
Also, beef up your security. Having liability policies to shoulder monetary damages following a data breach is helpful, but you need to reduce the risks of cyber exposures to criminal activity in the first place.
Still on the fence about which cyber liability insurance company your business should work with? Assured Standard helps business owners find the cyber insurance policies on the market by providing customized recommendations. Reach out to Assured Standard today!
