Protect Your Small Business with Cyber Liability Insurance

Written by Holly Hovland—Commercial Insurance Advisor

March 31, 2023 · 5 minute read

Blog Protect Your Small Business with Cyber Liability Insurance

With so many business practices now online, preparing against cyberattacks is just as important as protecting your business’s physical property. Cybercriminals often target small to mid-sized businesses, because they often lack the resources and capabilities necessary to defend themselves in the event of an attack.

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What are the main cybersecurity threats to small businesses?

Ransomware uses encryption to take control of your computer, preventing you from accessing any of your own data and potentially destroying it. If you are subject to this type of attack, you will likely be forced to pay ransom before the attacker releases your own data to you. A ransom can cost anywhere from $5,000 to hundreds of thousands of dollars, not including the expense of mitigating damages.

Cryptomining malware is another common attack caused by a hidden piece of malware code you accidentally download on your computer. The code then “mines” cryptocurrency tokens for the attacker, which causes your computer to slow down and makes it more susceptible to future attacks.

Spear phishing is used to trick people into giving up sensitive information and passwords, commonly done by forcing you to log in to a fake website. These highly skilled attacks generally address the person they are attacking by name, making you more likely to trust whoever they are impersonating.

Endpoint attacks occur when employees transmit data outside of their business’ secured network, often by taking a company laptop home or using a smartphone for work-related tasks.

While cyber liability insurance coverage isn’t new, the need for it is increasing as cybercrime rates rise. Many business owners assume their standard business policy will protect their company in the event of a data breach without realizing business cyber insurance often needs to be purchased as an additional policy. Most business policies specifically exclude cyber risk because of the variability between different companies’ assets and risks.

What does a business cyber liability insurance policy cover?

A cyber liability insurance policy typically covers the following:

Actual costs attributed to a data breach. This falls under Breach Response and Remediation Expenses and includes forensics, crisis management, etc.

Security/privacy breach liability protects against lawsuits and other legal actions taken from the exposure of confidential customer information.

Asset recovery covers the costs to restore, update, or replace hardware, software, or other data assets that may have been damaged.

Business interruption costs if you suffered a loss of revenue or extra expenses resulting from a data breach.

One of the greatest things you can do for your business is recognize you are at risk of a cyberattack and prepare accordingly. Ensuring you have the proper insurance coverage is part of that preparation. As your insurance advisor, I’m here to help in that process.

Schedule an appointment today to reduce your risk of falling victim to a cyberattack and help your business recover quickly in the event you do.

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Contact Holly Hovland, Montana’s Commercial Insurance Advisor today >>

Call: (406) 434-8060