Cyber crime is the fastest growing crime in the United States and 60% are perpetrated against small businesses. Small businesses who have been hit often do not have the proper insurance coverage and a high percentage end up closing their doors after an attack. Many owners don’t fully understand what these attacks are, or the costs associated with them. Any small business needs to have cyber insurance coverage.
Malware or Ransomware attacks are the most common. Malware destroys information or makes it impossible to access. This kind of attack suspends your ability to do business. You can lose clients from the inability to access accounts and spend thousands of dollars to get your system back up and running. Ransomware attacks occur when a hacker encrypts or steals the personal information you have on file. This could include the client’s social security number, credit card or banking information, etc. The hackers demand payment in order to “unlock” your system and may threaten to publicly release the client’s information. When these attacks happen, you’re obligated to notify all clients that were affected, hire an IT investigator to find where the leak came from and how to secure your information in the future, and pay local, state and federal fines. Many states, including Colorado, have enacted strict laws on how your business is required to protect others information.
Hackers are not the only way a cyber crime can happen. Ex-employees can steal and distribute company data. Current employees can be tricked into breaking procedure or doing non-work-related tasks at the office. It can also be as simple as misplacing a flash drive or leaving your laptop in the booth at a restaurant.
A Cyber Insurance policy is two-fold in coverage. The 1st party liability coverage includes notification to those clients affected, the cost of a computer forensic expert, man hours involved in contacting the clients by phone or mail. Extortion costs, media liability and public relation costs can be included. Business interruption coverage is available to keep your business afloat while your doors are closed. The 3rd liability coverage helps with the cost of litigation if you find yourself in a lawsuit.
Cyber insurance is available with most carriers, and coverage limits can vary to your specific needs. Call us today to discuss your cyber exposure and insurance needs.