man in hoodie hacking on his laptop

What To Know About Cyber Liability Insurance & Security

Every single business should be concerned about their online security.

There are so many cybercriminals out there, and they target a variety of companies and organizations. They aren’t just after big corporations, as many small- and medium-sized businesses have data and accounts that are worth taking

Since cybercrime is common, many companies do not take out cyber liability insurance to cover their firm. Do you think your company would benefit from this kind of insurance coverage? If you aren’t sure, continue reading or watch our video summary to find out what is covered.

Why Should Businesses Be Worried About Cybercriminals?

The first component to tackle is why businesses need to worry so much about cybercriminals. It’s generally because the threat from various types of cybercriminals is larger now than what it once was. Now that more and more companies have a web presence, viruses and hackers can target them easily. No matter where your business may be located, there’s a good chance a cybercriminal could target it.

Did you know that 60% of small businesses that suffer a cyber attack end up folding within six months?

That might sound alarming, but unfortunately, it is very true. That’s largely because the financial cost of cybercrime can be huge. If large amounts of customer data goes missing, a company might be fined, and it can be expensive to get their computer network secured once again. If you don’t want the headache of dealing with these big bills, then you without a doubt want to get cyber liability insurance.

Cyber Liability InfographicThe Financial Impact Of Cybercrime For Businesses

In this blog post, we’ve mentioned that being the victim of a cybercrime can be costly. Let’s inspect why. Data breaches became expensive in 2018, when the average cost rose by 6.4%, costing the economy $3.86 million. The cost of stolen documents rose too, as a single missing document would set a business back $148.

The cost isn’t just felt in expenses that need to be paid to fix the breach and retrieve data. There is also a significant loss of customers, and it can be very difficult to win the public’s trust again. After suffering a breach, most businesses lose 11% of their customers, which can create a major dent in their usual profits.

The effects of cybercrimes are costly, and aren’t something that many businesses can afford to deal with on their own. If they’ve taken out cyber liability insurance, their policy will pay out to cover most of the costs they entail. If you don’t think your business would be financially stable after dealing with so many expenses, taking out a policy for cyber liability insurance could be the best option for you.

The Main Causes Of Security Breaches

No matter what companies do to prevent security breaches, there is always a possibility that one can occur. That’s why it is advisable for all firms to take out cyber liability coverage since there is no way to completely prevent a hack or virus from attacking your business’s network and data.

Here are some main causes of security breaches that you need to know:

Not Handling Customers’ Data Correctly

Even though 58% of small businesses are worried about cyberattacks, figures show that only 51% have not put a budget in place for risk mitigation. There are many reasons this is the case, but studies show it’s because many small business owners wrongly believe that they aren’t storing any valuable data. Of course, most modern businesses do have some form of valuable data stored, so they need to look after it correctly to prevent losses and breaches.

Storing Valuable Data Incorrectly

Around about 68% of small businesses store email addresses and 64% store mobile telephone numbers – 54% store billing addresses! Even though you might not realize it, these are all considered valuable pieces of information. That’s because others can use them, especially data criminals and thieves.

If you track any of data, store it correctly. As an extra security measure, it would also be worth purchasing cyber liability insurance to ensure that you have coverage in a worst-case scenario.

Incompetence With Basic Cybersecurity Measures

Possibly the biggest reason small companies end up vulnerable to certain cybersecurity threats is they have been incompetent. For instance, even though it is essential that a company’s software and computer programs are regularly updated, only 38% actually do it. Plus, only 31% of small companies actively monitor credit reports.

It looks like most businesses only act to improve their measures after a breach has taken place, and then it’s too late. Only 22% will encrypt their database while a mere 16% will review their cybersecurity measures completely. A resounding 75% do not have any cyber liability insurance, means they will struggle to get on their feet in the wake of an attack and breach.

As you can see then, cybersecurity and data breaches a big deal in today’s business world. Even if you are a small business, it would still be a good idea to invest in cyber liability insurance so you know your company will continue to operate, even after falling victim to cybercrime.