Cybercrime is on such a rise that businesses are scrambling to protect their operations in all manners possible. For one, Madison County in Alabama has experienced an uptick in phishing and wire transfer scams in the past five years. So, it’s vital to not only implement solutions that minimize the risk of attack, but also measures that will help manage the financial risk of such threats.
Related article: Which of your employees are the most vulnerable to cyberattacks?
One such protection is cyber insurance, which protects your business from the financial damage cybercrime brings. For perspective, the global total cost of a data breach averaged $3.86 million in 2020 — that's a hefty sum that can immediately shut small- or medium-sized businesses down.
Cyber insurance may not prevent cyberattacks, but it can mitigate its financial effects on your business. And while a responsible IT managed service provider will invest in insurance, you can’t assume that their insurance will protect your business as well — it likely won’t.
Here are the top reasons why all businesses should have cyber insurance:
1. Cyberattackers hit all business sizes
It may sound bleak but there’s no escaping the threat of cyberattacks. However, it doesn’t mean that an attack is inevitable. It simply means that many malicious actors choose to launch a broad scope of attacks and follow up on wherever their exploit finds a foothold. It’s like throwing spaghetti onto a wall to see if it sticks.
So carry on your regular course of business activities, but while you’re busy beefing up your security profile, also consider procuring some cyber insurance. Similar to the car insurance that you spend on every year but hope to never use, cyber insurance policies will help mitigate any financial damage you may incur because of internet-associated risks.
Related article: What business owners should know about ransomware
2. It will help you save costs
Breaches and data loss can get expensive, especially once you factor in claims and lawsuits against your business. Not only do cyberattacks hamper your profitability and ability to serve your customers, but it can also leave you on the hook for damages that can seriously hurt your business’s ability to survive.
Cyber insurance coverage will help limit damage. For instance, some cyber insurance will cover lost income due to business interruptions, costs of hardware/software repair, ransomware payouts, public relations costs, and more. Other insurers may even cover regulatory fines, negligence claims, privacy claims, breaches of contract, and media liability claims.
3. It will improve how your investors and customers see your business
Investors like stability. They are much more likely to support your business if they know you are taking preemptive measures against financial losses. And especially now that ransomware is so rampant, you’ll want to assure them that their capital infusions are safe in your hands.
Also, customers will appreciate to hear that your company is protected by cyber insurance. You’ll find many insurers that will also cover certain damages to your customers’ hardware and software as a result of a cyberattack on your business. This adds another layer of liability protection for your company while providing your clients with a sense of security.
In the grand scheme of things, it’s always a good idea to have insurance. Insurance is already a regular expense for all businesses, and it pays for itself when an undesirable situation arises. It could be the variable that allows a cyberthreat-stricken company to survive another day.
Get a clear picture of your information system’s cyber insurance needs with F1 Solutions’ risk assessment services. We’ll take care of your compliance needs so you can serve your customers and protect your investors’ interests in one fell swoop. Contact us to learn more.