Technology continues to amaze, sometimes in alarming ways, opening new opportunities for Business owners. Today, the way we interact with our customers or sell our products or even take business decision is increasingly getting digital. Opportunities, indeed, are boundless. However, there is a devil out there which can throw a wrench in the works – and that’s Cyber crime. As the world is becoming smaller through technology, Cyber risk is becoming bigger. According to a research, there is a hacker attack every 39 seconds, and one in three Americans get affected every year. And many believe, this is just the beginning.
We, at Texas P&C Insurance, have put together Top 5 reasons why you need to consider Cyber insurance seriously.
1. Cyber risk is a top financial risk that can ruin businesses
When criminals breach and get access to your company data, they become privy to a vast array of sensitive information. This could include personally identifiable information (PII) of customers and employees, as well as business data. Recovering from such a data breach can cost organizations not just huge fines, but also business interruptions, security overhaul expenses and serious loss of reputation. On a bigger scale, it can lead to bankruptcies and business closure. Not surprisingly, Security is becoming a top agenda of any business, and Cyber liability insurance is a tool companies can use to prevent financial disaster.
2. Exposure to Cyber risk is growing everyday
The rise of e-commerce, customer portals and virtual data storage means limitless opportunities and convenience for businesses of all sizes. As organizations invest in these technologies and become more exposed to the cyber world, cyber-attacks and network hacks are more imminent.
In fact, most companies do not realize that they are being attacked multiple times a day by unauthorized individuals or entities trying to break into a network. The increasing amount of large-scale, well-publicized breaches suggests that not only are the number of security breaches going up — they’re increasing in severity, as well.
3. Small Businesses are at an equally grave threat
It’s a myth that cyber risk is only for the biggies. From florists to restaurants, to grocery shops, to mom-and-pop shops, the reality is that no business is too small to evade a cyberattack or data breach. Half of all SMBs in the U.S. experienced a data breach in the past year, and 55 percent experienced a cyber-attack. That’s staggering! Incidents can result from a wide range of causes, including hackers, malware/virus, malicious insiders, lost or stolen laptops and employee error. Without big technology departments and resilience mechanisms, small businesses are more likely to need cyber liability insurance against such threats.
4. Good may not be good enough
Alright, you say you have invested a great deal in cyber security and feel you will flourish forever. The fact is that Cyber risks are evolving every day. Even the best security systems, VPNs and software may still fail from time to time when going up against top hackers. New threats keep on adding to the cup and your protection agents are always in the struggle zone of keeping up. Figure this – Ransomware attacks are growing by more than 350% and Malware variants are growing by 80% annually. That’s staggering, and points to the fact that we are never safe enough.
5. Existing insurance policy may not cover Cyber risks effectively
Most businesses have general liability insurance or business owners policies (BOP) that cover bodily injuries, property damage, and advertising injuries. Some insurance companies provide endorsements for cyber coverage, but there are significant limitations that can make the policies ineffective in the event of a cyber incident.
Cyber liability coverage is still very much an evolving area of insurance. There isn’t always a lot of clarity around what cyber liability insurance is needed, what will it cover and what will it not. It’s therefore ultra-important for you to talk to a knowledgeable insurance agent who can guide you through the insurance buying process.
We, at Texas P&C Insurance, work hard to ensure your business is protected. Our insurance experts can help you through the process of identifying your exposures and selecting the right cyber risk policy for your business. Contact us at (972) 293-2139 or (800) 903-8690 today to see how we can help you.