Cyber coverage is one of the fastest growing sectors in the insurance industry. Why? What does that mean?
With the advent of the internet, many companies moved portions of their business online. Two decades on, the internet continues to shape and define the businesses relying on it. File cabinets have been supplanted by The Cloud, mechanical POS systems traded in for online credit-card processing. Some businesses have entirely foregone maintaining a physical office. The world has moved into cyberspace – and, unfortunately, criminals have come along for the ride.
We’ve all heard about cyber-attacks in the news – the massive loss suffered by Target and its customers in 2013, the crippling attack against Home Depot in 2014 which netted hackers over 50 million customer credit card numbers. A quick search online shows case after case where companies have been disabled or driven out of business by cyber-attacks. There is no doubt – hackers are out there, and they make their living off vulnerable businesses. Less well-known is that hackers don’t just go after large corporations like Target and Home Depot – in fact, 43% of all attacks are perpetrated against small businesses. That’s a scary thought for a small business owner, when statistics also show that a cyber attack occurs approximately every 39 seconds.
Coupled with cyber-attacks, there are fines to be considered. The Payment Card Industry (companies like Visa, Mastercard, American Express, etc.) expects businesses to protect their customers’ private information, and they level hefty fines against companies who suffer a preventable attack. There are a host of other regulatory bodies that dole out penalties to companies who allow their clients’ personal and confidential information to be breached.
So, what’s to be done? Does your business have a plan for how to deal with a cyber-attack? The world is online now, so running your business without the internet isn’t really an option. Hackers are in a constant arms-race with law-enforcement, and their lack of centralization means they are likely here to stay. Business owners must respond by pro-actively defending themselves from cyber-attack – and the best way to do that is with cyber insurance.
Cyber Insurance responds when your information systems have been breached – if a hacker accesses your databases, or “phishes” information from one of your employees. Depending on the level of coverage purchased, cyber insurance can help businesses recoup financial losses, pay off regulatory fines, reimburse customers who have had their information misused, and provide counsel on how to successfully rebuild customer trust in the wake of a cyber-attack. A good cyber insurance carrier can also help your business formulate a plan for how to deal with an attack. The right cyber policy is the difference between a business defending itself effectively or closing its doors forever.