Cyberattacks and data breaches are on the rise, and small businesses have become direct targets. In fact, almost half of all cyberattacks affect businesses with fewer than 1,000 employees. For small organizations, the financial consequences of a cyber incident can be devastating. They’re often expensive enough to put you out of business. In fact, over 60% of small businesses close within six months of a hack. The financial damage of a single hack can close your doors for good, and that’s why it’s so important to have a cyber insurance policy for your small business. Without securing a dedicated cyber insurance policy, most companies don’t have adequate insurance coverage to recover their losses. Cyber liability insurance is critical protection for small businesses operating in a digital environment. Let’s look at the benefits of cyber insurance for small businesses, and how it can support a strong cybersecurity posture.
What Is Cyber Insurance and How Does It Protect Small Businesses?
If you already have small business insurance, you might wonder if you really need dedicated cyber insurance. The short answer? Yes. Any business that handles personal customer data or stores information online should have cyber insurance. While small business insurance protects your company against a wide variety of damage and loss, cyber insurance specifically covers businesses in the event of financial or legal liabilities resulting from cyberattacks or data breaches. Your small business liability insurance policy probably doesn’t include robust cybersecurity protections, so it’s a good idea to get a separate policy tailored to cybersecurity.
There are three types of cybersecurity coverage, and each policy type offers a different layer of protection for your business.
First-party coverage is the most common type of cyber insurance policy. This is essentially data breach insurance, which covers the costs that have the most direct impact on your business. This usually covers:
- Costs of lost revenue due to business interruptions
- Investigation of the cyber incident
- Ransomware payments
- Credit monitoring
- Risk assessment to prevent future incidents
Third-party cyber insurance protects your small business if a third party, such as a client, sues you as a result of a cyber incident. This liability insurance helps cover:
- Legal defense fees
- Regulatory fines
- Legal settlements
Technology errors and omissions coverage (E&O)
E&O is a specific type of liability insurance that protects your small business in the event of an error on your part. This type of insurance coverage is especially important for technology businesses, like web designers, software developers, and marketing professionals.
E&O coverage helps protect your business if you’re sued for:
- Work errors and negligence
- Missed deadlines
- Inaccurate advisement
- Undelivered work or services
How Can a Managed Service Provider Help With Cyber Insurance?
Most small business owners understand the importance of building a strong cybersecurity program but aren’t sure where to turn for help. A managed service provider in Orange County, like TechHeights, can help you navigate the complex cyber insurance process and obtain the proper coverage for your business. But we know that insurance is just the tip of the iceberg. You want a strong cybersecurity program that prevents you from ever needing to use your cyber insurance policy. TechHeights knows that a strong digital security plan is the first line of defense against cyber threats. We offer comprehensive, multi-layered security support plans you can trust.
As small businesses, we understand the specific cybersecurity challenges faced by smaller organizations. Give TechHeights a call today to learn how our tailored solutions can help protect your business.Categories: Cyber Security