If I Sell Online, Do I need Cyber Insurance?
Caeva O'Callaghan | September 14th, 2021
If you’ve heard of cyber attacks in the news, you may be worried your business is at risk. But is it true that no matter what you sell, you need some form of cyber insurance?
Cyber insurance is vital to protect your business – and your customers – online. If you hold any sensitive information about your clients, customers or employees, cyber insurance helps to keep that data safe.
Not having cyber insurance when you need it will result in hefty regulatory fines, or worse. Always keep your policy up to date and review your online security measures on a regular basis.
In this article, we’ll cover the following questions:
- What is cyber insurance?
- Do I need cyber insurance?
- What happens if my business is hacked?
Any business which operates on the internet – in whole or in part – will benefit from the protection cyber insurance offers. Read on to find out more.
What is cyber insurance?
Cyber insurance is a type of insurance policy for businesses which helps pay for damages, fines and improving security measures if your business is targeted by cyber hackers.
The internet has made it possible for people to make money online, and for businesses to reach new customers all over the world. Unfortunately, it also means criminals can now target individuals and businesses easily and cheaply, from the other side of the globe.
Cyber attacks are increasingly common, and very harmful. Contrary to popular belief, it’s not only large organisations that are targeted – although these large security breaches hit the news, it’s more likely your small to medium businesses which lose everything to hackers.
Criminals use increasingly sophisticated techniques to obtain sensitive data such as passwords or credit card data which they then abuse or sell to third parties. It’s easier to target small businesses as they are more likely to have weaker security.
Any business, big or small, needs comprehensive cyber insurance. Customers expect their valuable data to be kept safe, and regulators can impose heavy fines for breaches in data security.
Do I need cyber insurance?
If your business operates online, in whole or in part (for example, you collect emails or credit card details) then yes.
You need to consider cyber insurance if your business:
- Relies on computer systems and online software for day-to-day operation
- Holds sensitive data about customers or employees (e.g. names, addresses or financial information)
- Owns a website
- Has a payment card industry (PCI) merchant services agreement in place
If any of the above apply to you, having cyber insurance will help you pay for ensuing costs if things go wrong.
You need cyber insurance even if you outsource IT services to a third party. Even if most of your online business is handled out of the office, your business will still hold information on your clients such as passwords, order history, addresses and more.
While cost-effective, these solutions are not necessarily a safer option. For example, November 21, 2019, Edenred, a payment solutions provider, reported that it was infected by malware. Operating across 46 countries, they managed 2.5 billion payment transactions in 2018. The number of people affected and the extent of the attack is still currently unknown.
What happens if my business is hacked?
If your business falls foul of cyber hackers, you will have cover for all associated costs.
Cyber insurance cover includes the clean up of the breach, notification to the affected clients, any resulting regulatory fines and third party liability awards.
As soon as possible after you realise your business has been compromised, you must inform the regulatory authorities. Failing to do so will mean in a hefty fine, as you will be in violation of GDPR regulations.
Don’t forget, cyber crime can have a devastating effect on your revenue. Loss of income as a result of a damaged reputation is a very real threat, as you are legally obliged to notify your customers if you suspect their data may have been stolen. In turn, this may affect their decision to renew your services. They may also leave unfavourable reviews online and via word of mouth.
You may even need to shut down or suspend trading for a certain period of time while you sort out the damage and put new security procedures in place. Your cyber insurance will cover you for this, as well as the costs of hiring security experts to upgrade your systems so an attack doesn’t happen in the future.
Confused about cyber insurance? Just give our experts a call, and we can help walk you through the options for your business.
All Information in this post is accurate as of the date of publishing.