By Devin Partida, Editor-in-Chief, ReHack.com
Every reputable small business knows insurance is a necessity. However, some may forego cyber insurance, thinking it isn’t a big deal. With how often cyber attacks happen, any company that stores information should get some form of protection. Small businesses can significantly benefit from this type of insurance, so they should make room in their budget for it — no matter what.
Are Small Businesses at Risk for Cyber Attacks?
Some industries are more at risk for cyber attacks than others, but every small business should strive to have a plan for dealing with cybersecurity issues. Nearly 45% of all cyber attacks target small businesses.
Even if a business thinks its cybersecurity policies are tight, cyber insurance can only benefit it. If a business stores data, it needs cyber insurance to protect it. Whether the business serves many or a few customers, these policies can help keep it covered in nightmarish situations its employees may need help to navigate.
There are different types of cyber insurance. Which one will work best for a particular business depends on what the owner wants:
- First-party coverage will help a business investigate the cybersecurity incident and provide a risk assessment to tell leaders how likely the company is to experience another cyber attack.
- Third-party coverage will help the business if someone decides to sue it for the fallout of a data breach or cyber attack where their information was leaked. The insurance can help pay for court and associated fees.
Business owners can talk with their insurance providers about all their options. They should be able to steer leaders in a direction that allows them to prioritize their needs while maintaining their budget. Small businesses should have room for insurance within their budget — especially when it can save them thousands of dollars.
What Cyber Insurance Can Do
Cyber insurance can save much grief after a data breach or some other form of attack. It can provide a monetary cushion allowing a business to return to normal after a threat, making it an essential part of any corporate budget, no matter how many customers it has.
1. Help Determine Risks
Some insurance providers will help analyze the risk of another cyber attack after the dust settles on one. In some cases, businesses may not even need to experience a real cyber attack or data breach for the provider to help them assess where their cybersecurity falls short and what needs to change. They can break the analysis into understandable terms, which can help business owners ascertain the risk and understand where they need change before something happens due to a gap in their security.
2. Repair Affected Devices
Sometimes, the money from an insurance policy can help repair affected devices. If ransomware demanded money, it might pay back the fees paid to release sensitive data from the clutches of a cyber criminal. A leader might also use this money to repair devices that were damaged by viruses, allowing them to wipe them clean and still have them for use later.
3. Educate on Better Practices
Some insurance providers may give out information on basic cybersecurity policies, which can help a business build it from the ground up. Many times, a breach can attribute to an employee not understanding the basics of online safety, which can help protect sensitive information and important accounts. Once a company has the foundation, it can create a cybersecurity practice that will work well and defend against subsequent threats.
4. Civil Damage from Resulting Lawsuits
If individuals experience trouble due to their leaked data, they may sue a business for the damages. The right cyber insurance policy can help avoid high court or lawyer fees. That way, an owner can work on building their business and trust back up while handling the lawsuits that may come their way.
What Cyber Insurance Cannot Do
Unfortunately, as wonderful as cyber insurance is, all business owners must know a policy will have limitations. It cannot protect a business in every situation, but it is immensely useful in many circumstances.
There are a few things not covered by cyber insurance:
- Reimbursement of future profits
- Lawsuits from any breaches or attacks
- Improvement of cybersecurity policies
Because nearly 30% of small businesses think they lack the skills necessary to protect their business, cyber insurance policies are critical for any enterprise that might be at risk. Cyber insurance can teach business owners how to protect their businesses from any future threats, making it a valuable asset no matter how many years someone has been in business.
Opt for a Cyber Insurance Plan Today
All small businesses should strive to make room in their budgets for cyber insurance. Since they are often the target of many cyber attacks, all leaders must have a plan to protect and recover their information. The sooner a business owner implements cyber insurance into their budget, the better.
A company can never be too prepared for something. In the end, customers might have more trust in the business due to its intensive preparation.
Devin Partida is an industrial tech writer and the Editor-in-Chief of ReHack.com, a digital magazine for all things technology, big data, cryptocurrency, and more. To read more from Devin, please check out the site.