If you are running a business, or intend to start one soon, you need to know the risks you will face with cybersecurity breaches. It does not matter how big or small your business is; as long as you have an online presence, you will be a target of cyberattacks. In a 2018 study by Beazley Breach Response Services, about 71% of all incidents under investigations targeted small- and medium-sized businesses, and about 13% targeted specifically small businesses. The US Securities and Exchange Commission reported that more than half of those businesses went out of business six months after being attacked.
These statistics show you the importance of securing your business from the start and maintaining a high level of security. In addition to having cybersecurity insurance for SMEs, here are a few other important things that you need to know about cyber insurance for your business.
What Is Cyber Insurance?
Cyber insurance, also referred to as cyber-liability insurance, is an insurance policy where you or your business enters into a contract agreement with an insurer to cushion you against losses that you could potentially incur through cyber attacks or network-based incidences. Most insurance companies cover incidences related to fund-transfer fraud attacks, ransomware, and business email compromise scam, among others. You should keep in mind that cyber insurance does not protect your business against cyber attacks. The insurer only comes in to assist your business in recovering in case of financial losses. It is your sole responsibility to ensure that you keep your security top-notch to protect your business from such threats.
Who Is Prone to Attacks?
Hackers have a lot of tricks they can use to access most companies’ systems. In most companies, employees are the most vulnerable, and hence the targets of most hackers. Studies show that about 20% of the times an attack happens is as a result of an employee accidentally disclosing sensitive information like personally identifiable information. Cyber insurance policies cover select types of risks. You must understand the terms of the contract that you sign up for when taking a particular policy.
Some insurance companies might be unable to cover for losses your company makes, like in the case where you process card payments online. Most cyber insurance policies will also not pay claims that are a result of your company’s negligence. A case in point is the Equifax data breach that allowed hackers to infiltrate hundreds of millions of personal identifying data including customer records and other sensitive information. The company had seriously neglected its cybersecurity protocols to the extent of failing to renew an encryption certificate and also failing to publicize the attack on time. In such an incidence, a cybersecurity insurance company has enough grounds to refuse to pay any claims.
Importance of Cyber Insurance Solution
Compromise or loss of company data results in a negative impact on any business in terms of revenue and identity. Your business can be sued for exposing third-party data, leading to even more financial losses. You can easily close down your business, declaring bankruptcy from just a single serious breach. Cybersecurity insurance plays a vital role in protecting your business from such financial shocks. The insurance can assist your business recover from such shocks by covering for the losses. It is, therefore, in this modern technology that you have your business fully covered as well as have a strong security system protecting your business’s online presence.
The post What Is Important to Know About Cyber Insurance for Business appeared first on Home Business Magazine.
source https://homebusinessmag.com/management/insurance/important-know-cyber-insurance-business/
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