SMALL AND mid-sized businesses are increasingly bearing the burden of cyber threats, as criminals are betting they do not have the resources in place to mount a strong defense.
A severe attack on a small company can incapacitate its ability to do business, and the expenses of getting operations back on track – coupled with loss of goodwill – can easily force a firm into bankruptcy.
Unfortunately, with more data breaches hitting the news, one of the main concerns that executives have is if their insurance will cover the costs of recovering from an attack.
If you are running a small or mid-sized company, do not underestimate the growing threat to your business. Your chief priorities should be protecting against the threat and having proper insurance coverage in place.
TOP SIX REASONS FOR CYBER-RELATED LOSSES
- Malicious breaches resulting in data losses: 52%
- Unintentional data disclosure by staff: 16%
- Physical loss or theft of data: 13%
- Network or website disruptions: 5%
- Phishing, spoofing and social engineering: 5%
- Other: 9%
Source: Advisen and Nationwide Insurance Co.
One of the chief concerns for executives is any overlap or gaps between their property, liability, crime and cyber policies when it comes to covering the costs of recovering from an attack, according to a report by insurance news website Advisen and Nationwide Insurance.
Some companies feel they don’t need cyber coverage because they believe their property and liability policies will cover any related losses
- 95% of respondents named data breach as the number-one risk they expect to be covered by a cyber insurance policy.
- 94.5% expect cyber-related business interruption to be covered by a cyber policy.
- 89% said they expect their cyber policy to cover ransom demands.
- 60% of respondents are concerned about gaps in their coverage.
Since cyber insurance is a new and evolving product, all policies do not cover the same thing. That’s why it’s important to weigh your choices carefully and consult with us.
Meanwhile, more insurers are changing language in their property and liability policies to limit coverage of cyber events.
Because of market demand insurers may refine their cyber insurance policies, including increasing cyber-related business interruption limits, according to the Advisen report.
To find the best coverage for your business, please talk to us. We can help you evaluate your risks and coverages and identify any gaps by looking at your existing policies.