By: Reggie Dejean, Director of Specialty & Cybersecurity Insurance at Lawley
You already know that data breaches can be tough on the bottom-line of your business. Every day on the news, it seems another well-known big-box or small business is apologizing to the public for a breach.
Apologizing to customers and clients is not enough. What about the costs to resolve a breach? Lawsuits? Implementing new IT defenses? Help is available to offset many of these expenses and hassles –Cybersecurity insurance.
Cybersecurity insurance is not just for large organizations. In fact, it could be more vital to a small business that cannot afford the financial hit when a cyber-attack occurs. With over 60 percent of small businesses going out of business after a breach, understanding how cybersecurity insurance helps mitigate the first-party costs that occur when a breach happens is very important.
The costs of dealing with a breach can quickly add up, even before a lawsuit is presented. Your costs can run into hundreds of thousands of dollars for the credit monitoring, notification costs, and public relation efforts. All costs that a small business can incur that may put them out of business. Cybersecurity liability insurance is designed to help protect a company in the event of a data breach and help offset many of these costs.
Minimum premiums can start at around $1,000 a year for small businesses and nonprofits, with limits of one million dollars of coverage. This goes a long way to cover the costs that can be inflicted once a data breach occurs.
Think about a small business – one million, two million, or three million of revenue. When you start looking at the credit monitoring, the legal costs, the forensic costs, you can easily be in the $200,000 range. How many businesses can afford $200,000 after a data breach? The answer is: not many.
Businesses don’t usually have the financial capacity to survive an interruption of their online presence, not to mention legal action brought against your company by government agencies or affected individuals. The cost alone to defend one of these claims could be catastrophic to your business. Cybersecurity Liability coverage may provide you with the necessary protection from a wide range of losses that could arise out of a network failure or data breach.
When it comes to a data breach these days, it is not a matter of “if”, but “when.” If you’re worried about when you’ll get hacked, talk to a cybersecurity insurance specialist today to stay ahead of the curve.
Join us for our upcoming Cybersecurity Seminar on September 19th