Today, it is fairly common to see headlines about cyber attacks, breaches or extortions. Still, many business owners may question whether they truly need cyber risk insurance. If you are considering going without this coverage, it is important to first consider the following advantages that this insurance offers for every business.
- Protection Against Liability – Businesses can be held financially responsible for data loss during cyber attacks. Anyone from clients to employees may seek damages after a data breach occurs. Businesses may also face regulatory sanctions, especially if they store sensitive information. For instance, the loss of medical data can result in fines for HIPAA violations.
- Financial Support After Attacks – Many business owners worry primarily about the cost of fighting a third-party claim or paying any damages that are awarded. However, cyber attacks can also create numerous expenses that affect your business immediately.
These attacks can result in missed revenue and lost clients. If an attack is successful, you may have to cover expenses associated with resuming business operations and ensuring that another breach does not happen. For example, you will likely have to pay experts to investigate the breach, improve security protocols and perform regular updates to ensure ongoing protection.
Ensuring Peace of Mind
Cyber crime has become so common that it is no longer safe to assume that it simply will not affect your business. Any business that stores information virtually or conducts online transactions may be at risk. Although careful security protocols can help reduce this risk, a well-chosen cyber risk insurance policy is the only way to truly protect against this threat.