Are you looking for new insurance products that will help you protect your business? As a business owner, you probably have some type of insurance to protect your business; however your business may still be at risk. These risks come with the proliferation of the internet and the digital age which is why cyber liability insurance coverage is essential to protecting your business.
What is Cyber Liability insurance coverage?
According to Techopedia, cyber liability insurance coverage is a form of business insurance to protect against internet-based risks. The most common risk that is insured against is data breaches. Cyber insurance typically includes indemnification from lawsuits related to data breaches, such as errors and omissions. It also covers losses from network security breaches, theft of intellectual property and loss of privacy.
As a business owner, you may ask why you should care about cyber insurance. Here are two reasons why:
- If you are running a business, technology can be your best friend or enemy. Many small businesses rely heavily on technology to help them manage their business from emails, social media and even managing their own website. However, cyber crime is on the rise and poses a threat for businesses of all sizes. The difference between small business owners and Fortune 500 companies is that large conglomerates can afford the large payouts. In contrast, small businesses may go out of business because the cost of clean up after a breach can be considerable, not to mention revenue loss during downtime.
- According to Chubb Insurance, cyber criminals increasingly focus on small businesses because most small businesses mistakenly think that cybersecurity services are beyond their means.
Why do businesses need Cyber Liability insurance?
According to Unitrends.com, data loss or theft can have a devastating impact on an organization, including financial losses. Cyber liability insurance helps cover costs associated with mitigating data breaches or cyberattacks. Some of these costs may include:
- Forensic investigations
- Litigation expenses
- Regulatory defense expenses (fines)
- Crisis management expenses (i.e. the cost of notifying affected customers, restoring personal identities of affected customers)
- Business interruptions (costs of recovering compromised data, costs to repair damaged information systems)
- Cyber extortion
What to look for in Cyber Liability coverage
Since small businesses are a big target for cyber criminals, a priority for you will be getting adequate cyber insurance coverage to protect your business. Here are a few of the coverage options your policy should have:
First and third party coverage
Make sure your cyber liability insurance coverage includes first and third party coverage. First party coverage will help you restore your company’s operation and the loss of your income during downtime. Furthermore, third party coverage helps to provide assistance for legal fees, damages and expenses to notify individuals.
If you are doing business and have customers outside of North America, it is important that you have worldwide coverage. Since cyber attacks can occur outside of our home location, worldwide coverage provides protection anywhere in the world.
Business interruption coverage
If your business experiences a cyber attack, it can take several hours, days or weeks before your business is up and running. Business interruption coverage can provide financial assistance while your business is recovering from the incident.
Funds transfer fraud
One of the common types of cyber attacks is when cyber thieves get access to the login information of your third party services. They often target your banking information and/or access to other merchant services. If you have an e-commerce business and you complete a lot of online transactions, funds transfer fraud provides coverage if cyber thieves get access to your financial information and fraudulently take money out of your account.
24/7 expert assistance
A cyber attack can happen at any time and most small businesses don’t have access to a full-time IT person. Therefore, your cyber policy should include 24/7 access to IT professionals to help you resolve cyber attack-related issues to get your business up and running as soon as possible.
What types of businesses need cyber security insurance?
Every business, regardless of the size, presents an opportunity for a cybercriminal to make money. According to the Canadian Centre for Cyber Security, the average cost of a data breach in Canada is $6.35 million per breach. The average cost of a ransomware attack, including payout and recovery, was $2.3 million in 2021, more than doubling from 2020. Just one cyberattack can leave a business in financial ruin. Cyber insurance policies are essential to companies that use computers or store electronic data. As businesses continue embracing digital operations, cyber insurance should become widespread.
How much does Cyber Liability Insurance cost?
According to HelloSafe.com, the price for cyber insurance in Canada begins at around $550 per year. Companies holding financial data or healthcare information can expect to spend $1,000 per year or more. Your total premium will depend on the type of business you have and the amount of insurance you deem necessary to protect your business against potential data breaches.
Getting started with Cyber Liability insurance
A good first step is to create a cyber risk profile for your company, and to create a list of expenses you want to have covered in the event of an incident. Then, you can determine an estimate for third-party costs. Call us or request a quote online. We’ll be happy to help with your business insurance needs.