Today, businesses increasingly rely on technology to manage data and to reach customers. Unfortunately, the more a company relies on technology, the more they are exposed to cyber threats.
In case of a data breach, having cyber liability insurance can be the difference between business continuity or bankruptcy. This coverage provides financial protection against cyber attacks, data breaches, and other technology-related risks. But how do you know if your business needs it? Read on to find out.
Your Business Collects Customer Data
If your business collects customer data, having cyber liability insurance is not just a preference but a necessity. The reason is simple––information is valuable. Any data you collect, be it customers’ names, addresses, credit card information, or other personal details, could potentially be targeted by cybercriminals.
A single data breach can not only lead to significant financial loss but also damage your reputation, which almost always results in lost business. Cyber liability insurance can provide protection for such losses, helping you handle the aftermath of a breach.
The policy can sometimes help you cover the costs you incur when responding to a data breach, including forensic investigations. This can save your business from significant out-of-pocket expenses that could cause financial strain.
Compliance with data privacy laws and regulations is another critical reason to consider this coverage. You shouldn’t overlook the fact that many jurisdictions oblige businesses to safeguard consumer information. In the event of a breach, businesses often must notify affected customers and sometimes pay for credit monitoring services.
Your Business Processes Payments Through the Internet
Processing payments through the internet inherently makes a business vulnerable to cyber threats, hence the need for cyber liability insurance. Online payment platforms process and store credit card numbers, bank account details, and personal identification numbers (PINs).
This valuable and sensitive information is an attractive target for cybercriminals, who can use it for fraudulent transactions or sell it on the dark web for nefarious purposes.
Additionally, businesses using online payment systems are always threatened by distributed denial-of-service (DDoS) attacks, which can cripple their payment gateway. DDoS attacks flood the server with fake web traffic, making it impossible for legitimate customers to access the website.
Cyber liability insurance can cover losses incurred during a DDoS attack and even help your business get back online quickly.
You Have Employees With Access to Sensitive Information
If your business environment allows employees to access sensitive information, you open up another potential avenue for cyber threats.
Despite best practices and strict protocols, employee actions can unintentionally lead to data breaches. This can occur through simple errors, such as misplacing devices containing sensitive data, falling for phishing scams, or using weak passwords that are easy for hackers to crack.
Some businesses often provide employees access to internal networks and systems that, if compromised, can lead to devastating cyber attacks.
For instance, ransomware attacks often begin by infiltrating low-level employee access before moving laterally across the network, progressively compromising more systems. When such attacks occur, the cost of restoring systems and data can be astronomical.
Beyond this, businesses also suffer from operational downtime, loss of revenue, and reputational damage, all of which can financially incapacitate a company. With good cyber liability coverage, you can mitigate the financial impact of such attacks and restore your business to operational status quickly.
In today’s digital age, cyber threats constantly evolve, and no business is immune. From small startups to large corporations, every company faces significant risks from cyber-attacks and data breaches. So don’t wait for a cyber disaster to strike. Talk to us at Family Insurance Centers about how you can safeguard your business and its future by investing in this essential coverage.