From defraying costs following a potential incident to indemnification for legal fees, small business cyber insurance helps ensure protection against events like data breaches of client information and ransomware attacks.
Here are six (6) benefits of cyber insurance for small businesses:
It compensates losses that resulted from business downtimeDestructive cyber attacks, such as ransomware, can lead to unexpected downtime. Depending on the severity of the attack, everything from individual user computers to servers can be rendered unusable; even after recovery business interruptions may continue if data has become corrupted or only partially restored. Cyber insurance may help cover the costs of any revenue lost during downtime caused by a cyber attack, as well as associated expenses. | It can help cover the cost of regulatory finesFollowing a data breach, your business may face additional losses due to regulatory fines and regulatory defense costs, especially if your business holds sensitive client data. Specific cyber insurance for small business policies may help cover such costs. Additionally, policies may help cover legal defense costs necessary for any legal challenges beyond regulatory fines. |
It’s necessary for regulatory compliance, including customer notification requirementsState and provincial regulations may require your business to notify clients in the event of a data breach containing PII. Small business cyber insurance can help you comply with such regulations and cover the cost of customer notifications. Policies may also help cover the cost of operations like providing credit monitoring to impacted clients for a specified period of time. | It can help recoup costs associated with recovering compromised dataYour business may lose access to data following a variety of cyber attacks, including a malware incident or ransomware attack. Data mining and recovery can be expensive and require specialized technical knowledge. Small business cyber insurance policies can help cover these costs. |
It can cover the costs of replacing damaged equipmentCyber attacks can degrade your organization’s equipment, leading to unforeseen additional costs in repairing or replacing damaged hardware . For instance, compromised software may lead to a server crashing and needing to be replaced due to the extra computational strain. In such cases, cyber insurance policies can help cover this cost.Additionally, you may find your systems have been compromised with highly persistent or stealthy malware. In such cases, it may be cheaper to replace any potentially compromised hardware. Again, small business cyber insurance can help these costs. | It can cover ransom compensationIn the event of a successful ransomware attack, your business may have to choose between paying the ransom and potentially losing all of its data. While data recovery from backups is always preferred, if they’re unusable, payment may be the only option for a businesses’ recovery. In these circ*mstances, having broad language to pay expenses on behalf of the insured can be immensely beneficial to cover cyber recovery costs. |
