What Are The Risks Of Not Having Cyber Insurance?
Caeva O'Callaghan | July 8th, 2021
You might have heard of cyber insurance, and are wondering if it’s right for you. It sounds like a good idea – but what happens if you’re hacked, and aren’t protected?
If you do not have cyber insurance, you may lose your business. If a data breach occurs and you cannot reasonably cover the regulatory fines, compensation, forensic investigation and public relations costs, not to mention legal fees, out of your own pocket, then you need to find another solution.
Getting cyber insurance ahead of time will mitigate these risks, and help you cover expenses if things go wrong.
In this article, we’ll talk about the following topics:
- Do I need cyber insurance?
- What happens if I don’t have cyber insurance?
- How do I get cyber insurance?
More and more businesses are moving online. If you store or process data, your business will need some form of cyber insurance in place.
Do I need cyber insurance?
Yes, even if you are a small business. If part of your business relies on storing data, maintaining a web presence, or otherwise engaging with digital information, you will need cyber insurance in place – even if you only deal with third party services.
On a regular basis, stories hit the news about large multinational companies falling victim to cyber-attacks. It’s easy to think such catastrophes only happen to big corporations – unfortunately, the opposite is more likely.
In fact, multinational companies aren’t an attractive target to your average cyber criminal. Their security is far more advanced, and there’s a much greater risk of the attacker being exposed. Hackers can target any business that has an online presence, from anywhere in the world – and they often choose small to medium enterprises because they rely on the owners’ lack of knowledge about cyber security.
And If you use email, hold customer data, or take online payments, this data could be at risk. The size of your business doesn’t matter.
What happens if I don’t have cyber insurance?
If your customers’ personal identifiable information is lost, stolen or leaked, you must report it. And from May 2018, the General Data Protection Regulation (GDPR) means a company can be fined up to €20 million or 4% of its turnover (whichever is the higher figure).
This is undoubtedly a massive blow to any small business. You may have to cease trading altogether. All in all, it’s not worth the risk. Cyber insurance will protect you from these legal costs, as well as other associated expenses.
According to research carried out by Apex Insurance, half of all cyber crime is committed against small businesses. Most attacks are not reported to gardaí, despite the fact cyber attacks are the fastest-growing crime. In 2018, UK retailer Dixons Carphone uncovered unauthorised access of data held by the company, involving 5.9 million payment cards. One or two pounds charged to those cards may not seem like much, and is likely to go unnoticed by the account holder. However it amounts to a huge amount overall for the hackers.
Globally, the average total cost to a company of a data breach is $3.86 million, according to a study by the Ponemon Institute. This means an average of $148 per stolen record – a cost very few small or medium businesses could afford.
How do I get cyber insurance?
In order to protect your business, you need to buy a cyber insurance policy as soon as you can. You can do this by contacting your existing business insurance provider and asking if they provide cyber protection.
Of course, you’ll need to give them standard information such as your name, address and business details. Also, you will need to tell them exactly what data you store and use, and why. This will be essential for providing the kind of cover you need.
Talk to our cyber insurance experts
Feel free to call and talk to our cyber liability insurance experts and we can provide you with a quote to meet all your needs. We have several experts on board who can help you.
All Information in this post is accurate as of the date of publishing.