Starting a business isn’t usually easy. It requires dedication and investment. Small business owners often wish they could do without insurance because spending for something they might not need feels counterintuitive when money is tight.
But the risk is too significant to go without business insurance. Unfortunately, a standard business policy isn’t enough for most companies in today’s world because of the prevalence of cyber crimes. Cyber security should be part of any company’s business plan if they have an online presence.
But even the most robust cyber security program isn’t foolproof, and when it fails, you’ll realize the importance of cyber insurance for business.
Cyber Security Risks
There are many ways cybercriminals cause problems. For example, they can shut down digital retail platforms, demand money to access accounts, and plant viruses to corrupt your files or website. Some of the most common are explained below.
Ransomware is a type of cyber attack in which the hacker steals data or blocks access to your site, threatens to sell or publish your data, or continues blocking your access until you pay a ransom.
As long as companies continue to pay the ransom, this type of attack will continue to become a greater risk.
In a phishing attack, the hacker pretends to be someone you know or from a trusted organization.
They send an email with an attachment or link, and when the recipient opens it, they unwittingly provide account information. The cybercriminal can then use that information to access data or implant malware.
For small companies without a lot of bandwidth, it doesn’t take much for hackers to overwhelm the website, causing it to crash. Every hour a website is down, a small business loses money, especially if they have a retail site or conduct most of their business online.
A competing business could hire a hacker to shut down its competition using this method of cyber attack. While it’s certainly not a legal, ethical, or good way to compete with competitors, it’s effective.
Business Cyber Security Weaknesses
The employees are usually the weakest link when it comes to cyber security. For example, a business may follow the most stringent security protocols, but if one employee has a weak password, cybercriminals can use that as a way to infiltrate.
In addition to weak passwords, criminals can use employees to break into your business by using phishing schemes and trying to trick employees into sharing information and essentially ushering them into your website.
Cyber insurance doesn’t just help with the financial repercussions of a cyber attack. It’s in the insurance provider’s best interest to prevent attacks so they reduce the odds that they’ll have to pay a cyber insurance claim. So, most cyber insurance plans include cyber security benefits.
You can add cyber insurance to a commercial liability insurance policy, or you can shop around for a stand-alone policy.
A cyber insurance policy can provide coverage for your losses following a cyber attack. This is called first-party coverage. Third-party coverage protects your clients from their losses following an attack on your business.
Over half of small businesses have been victims of cyber attacks, so it’s a real risk to every small business with an online presence. Cyber insurance can help you prevent attacks and recover when they happen.