Small businesses are increasingly being targeted by cyber criminals. This is a major problem since around 60 percent of small businesses are impacted to the point of closure after a cybersecurity breach. Sometimes small businesses lack the necessary protection to defend from these major events. This is why it is important to have an insurance policy to fall back on in case your business is affected by a digital crime.
Cybersecurity Audit
Across almost all industries, a good place to start is by doing a cyber audit. Find a good IT company to come, assess risk, and give you recommendations on how to keep your business safer. This process helps identify vulnerabilities you might not even be aware of, from outdated software to weak access controls. As you implement better security precautions, like two-factor authentication, it can even lower your insurance premiums as you have less risk.
Cyber Insurance Policy
A cyber insurance policy is a necessary fallback option to keep your business protected. It is good to have for small businesses since they are generally inexpensive. Cyber insurance makes it easy for small business owners to sleep at night knowing that if something does happen, they will walk into work on Monday with a cyber insurance team and policy behind them to help get their business back up and running as soon as possible.
Some coverages that can be on a policy are data breach, ransomware, and system recovery. If someone comes in, shuts your system down, and they require a ransom, some insurance companies will pay a ransom out to these folks to unlock your system and get it back.
Sometimes, someone would come in and compromise your systems or do bad acting. They may watch your emails for a little bit and then send stuff out to your employees to wire money out to somebody. That will be a funds transfer which is also covered under most policies. Each Insurance Company that handles cyber has a different take on it and has different coverages tailored to your type of business. If you are a retail store it is going to be different insurance than something like an IT business. Depending on what you do, talk to an insurance professional to figure out what is the best policy for you and what coverages are pertinent to your business to keep you safe.
Exclusions
Cyber insurance policies are essential for protecting businesses against digital threats, but it’s important to understand that not everything is covered. One major exclusion is failing to report a cyber incident in a timely manner. Many policies require you to notify the insurer within a specific window, or coverage could be denied. Another surprising example is cryptojacking, where hackers hijack your systems to mine cryptocurrency, leading to unexpected costs like increased electricity bills. To further highlight the importance of a cyber audit, some policies exclude coverage for outdated or unpatched software. As the cyber threat landscape continues to evolve, often changing month to month, working with an insurance professional can be helpful so you know what is covered.
We have a commercial lines team at Susquehanna Insurance that specializes in cyber insurance. We are happy to talk through what coverage you may or may not need for your specific business and answer any questions you may have. Give us a call and we’re happy to work with you to make sure your business is safe.