What Businesses Need Cyber Insurance?
Caeva O'Callaghan | December 4th, 2020
You may have heard of cyber insurance. It protects against digital attacks and keeps your data safe. But what kind of businesses need it?
If your business operates online, or deals in digital information of any form, you will need cyber insurance. This is to keep the data you store safe from hackers.
Cyber insurance doesn’t just cover your customers’ credit card information, names, addresses and other data. It also covers data about you and your employees. This is why cyber insurance is vital.
In this article, we’ll cover the following questions:
- Does my business need cyber insurance?
- Do I have to have cyber insurance?
- What data does cyber insurance protect?
In short, if you store or process data, your business will need some form of cyber insurance in place.
Cyber insurance and your business
Any business that relies on computer systems and the internet is open to cyber attacks. These are malicious attacks from hackers and criminals worldwide which should be taken very seriously. A cyber attack can be just as damaging, and more so, than a physical break-in. Attackers can not only steal money, but also sensitive data leaving the personal security of yourself and your customers’ vulnerable.
Most businesses these days operate online, somehow. Even a self-employed plumber, for example, may maintain a Facebook page or a website. You may store customers details in a CRM system, or maintain employee’s details on your system. You may offer contactless payment via PayPal or some other payment processing application, or handle your customers’ bank transfers online.
You need to consider cyber insurance if your business:
- relies on computer systems and online software
- has sensitive data about customers or employees, like names, addresses and financial information
- has a website
- has a payment card industry (PCI) merchant services agreement in place
As you can imagine, these criteria cover a large number of businesses. When considering purchasing cyber insurance, you must weigh up the potential impact of sensitive data being leaked to criminals.
Small businesses and cyber security
Some people feel that their business is too small to warrant investing in cyber insurance. They are wrong. No business is too small for hackers, because hackers can target multiple businesses in any country, at any time. To them, it’s a numbers game. It’s safer for the criminals to exploit poor security in smaller businesses and steal a couple of hundred euros at a time than target a big corporation for a smaller chance at winning thousands.
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.
More important than the money lost, perhaps, is the legal implications of allowing such a crime to happen. 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.
How to 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.
You will 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.
Alternatively, give us a call and talk to our cyber liability insurance experts and we can provide you with a quote to meet all your needs. We look forward to helping you.
All Information in this post is accurate as of the date of publishing.