The pandemic pressed many businesses to go remote. While this enabled employees and their organizations to continue doing business in the face of global uncertainty, the fragility of
cybersecurity infrastructure became more apparent than ever. From remote work to a more powerful online presence, cybersecurity threats are a significant challenge for many organizations. With data security, exposure to these threats meant cyber insurance needed to be amped up.
In the race to fortify cybersecurity, small businesses, which have limited resources to train their IT staff, have much catching up to do. As a matter of fact, practically all small businesses maintain sensitive data on their staff, clients, or suppliers, making them open to hacking attempts, malware attacks, digital fraud, and other online threats. A cyberattack can force a firm to cease operations, incur significant losses, and unanticipated costs, and harm their brand. This is why cyber insurance is so critical.
Here are four things SMBs must understand about cyber insurance and what it covers.
In Case of Data Breaches
Data breaches are one of the most common types of
cyberattacks on small firms. Cyber insurance covers the cost of locating the origin of a data breach and assessing whether the information lost poses any legal obligations. It also includes the price of meeting those obligations, including sending notifications to affected clients, setting up a call center, and providing credit monitoring, as well as the price of hiring legal counsel and paying any fines or penalties.
In Case of Malware Attacks
Ransomware and malware attacks allow criminals to break into an organization’s back-end data. They use it to steal customer information or simply encrypt it which allows them to demand random from the business to reclaim access.
Cyber insurance can pay for all of the expenses involved in restoring the system, including recovering data, ransomware removal, vulnerability patching, and, if required, paying the ransom itself. A ransomware attack is the most disruptive, and it may be covered if there is economic loss for the company.
In Case of Phishing and Cyber Fraud
By gaining access to a company's computer system, social engineering lets criminals trick employees into settling fictitious bills or diverting cash to their accounts. Businesses may be able to recoup lost funds with the use of cyber insurance.
Third-Party Coverage
Third-party insurance can shield firms from cyber-related legal troubles, such as government response or class-action lawsuits brought on by, for instance, unintentional malware spread or the inability to curb unauthorized access to company systems. It covers all legal expenses, such as settlements and lawyer fees.
What’s the Bottom Line?
Cyber insurance cannot be an alternative to a robust cyber security infrastructure. And small businesses cannot afford to keep vulnerabilities in their systems. Many cyber advice solution providers offer advisory and risk assessment services that may be just what small and medium-sized businesses (SMBs) need to start improving the security of their systems.