1. Data is a valuable asset
Your data is almost certainly worth many times more than the physical equipment that stores it. A standard property policy would not respond in the event that this data is damaged or destroyed. A cyber policy can provide comprehensive coverage for data restoration and rectification in the event of a loss, no matter how it was caused and up to the full policy limits.
2. Systems downtime is not covered by business interruption policy
If a cyberattack, computer virus or malicious employee brings down electronic point-of-sale software or other important electronic functions, a traditional business interruption policy would not respond. Cyber insurance can provide coverage for loss of profits associated with a systems outage caused by a computer virus or denial-of-service attack.
3. Cyber crime is fastest-growing crime
Thanks to the internet, your business is now exposed to the world’s criminals and is vulnerable to attack at any time. Phishing scams, ransomware, identity theft and phone hacking are all crimes that traditional insurance policies do not address. Cyber insurance can provide coverage for a range of electronic perils that threaten your financial resources.
4. Your company can be held liable if it loses third-party information
Non-disclosure agreements and commercial contracts often contain warranties and indemnities in relation to data security that can trigger expensive damages claims if a breach occurs. Consumers may file suit after businesses lose their data. You can also be subject to fines for not acting quickly and notifying clients whose data may have been breached. A cyber liability policy can help protect against these various costs.
5. Portable device loss or theft
A laptop left on a train, an iPad stolen in a restaurant, or a USB stick going missing are all good examples of risks that can open your company up to data theft or stolen intellectual property. Cyber insurance can help cover the costs associated with a data breach should a portable device be lost, stolen or fall victim to a virus.
6. Retailers face severe penalties if they lose customer credit card data
Global credit card crime is worth over $7.5 billion a year, and increasingly this risk is being transferred to retailers whose customers’ credit card data is breached. Under merchant service agreements, compromised businesses can be held liable for forensic investigation costs, credit card reissuance costs and actual fraud conducted on stolen cards. These losses can run into hundreds of thousands of dollars for even a small retailer. Cyber insurance can help protect against all these costs.
7. Complying with breach notification laws costs time and money
Breach notification laws generally require businesses that lose personal data to notify individuals who were potentially affected. Customers who have had their data compromised expect openness and transparency from the businesses they entrusted it to. Cyber policies can cover costs associated with providing a breach notice, even if it is not legally required.
8. Your reputation is your number one asset, so why not insure it?
When your systems have been compromised, you run the risk of losing the trust of your loyal customers, which can harm your business far more than the immediate financial loss. Cyber insurance can not only help pay for the costs of engaging a PR firm to help restore this trust but also for the loss of future sales that arises as a direct result of customers switching to your competitors.
9. Social media claims on the rise
What employees say on behalf of the company on social media can be a liability if posted carelessly. A cyber policy can cover claims arising from leaked information, defamatory statements or copyright infringement.
10. Small firms increasingly targeted
While the large-scale attacks in the news often involve big companies, small firms are also at risk and often don’t have the financial resources to get back on track after a cyberattack or other kind of data loss. According to Symantec’s “The Threat Landscape in 2024” report, the fastest growth area for targeted attacks is on businesses with fewer than 250 employees, accounting for 31% of all attacks. A cyber liability policy can help protect smaller companies against the potentially crippling financial effects of a privacy breach or data loss.