Why should SMBs invest in cyber insurance?
In today’s digital economy, frequent cyberattacks are putting confidential data at risk and causing immense business losses. SMBs are at the highest risk of cyber attacks due to their limited resources. Therefore, SMBs that aspire to succeed in these uncertain times, must include cyber liability in their security infrastructure to protect their business against the risk of cyberattacks. Mobile Computer Services, a managed IT company in Wake Forest, discusses why cyber insurance is so important for small businesses today.
Statistically, 25% of organizations file for bankruptcy and 9.7% go out of business after a successful cyber attack. According to DataStream, 89% of businesses that have cyber insurance said that it covered their losses and that they were very glad they did have it.
A strong cyber security plan is necessary for any organization today. However, with constantly evolving and advanced cyberattacks, no cyber security protocol is foolproof. Cyber insurance covers 1st party and 3rd party cyber losses such as investigation costs, hardware, and software damage costs, fines incurred by lost data, lost revenue, lawsuits from individuals due to data loss, and so on.
In scenarios where security is breached, cyber insurance serves as a big safety net offering the following advantages:
Covers data breach
It is the legal responsibility of an organization to inform affected parties of a data breach. Not only does the organization now have its own data breach costs to bear but also the legal costs of a client data breach.
Business interruption loss reimbursement
A cyberattack means disruption of operations due to a probable IT failure. In such a case loss of income and time due to this interruption can be massive. Cyber insurance offers coverage for the loss of income during these disruptions and may also include the increased cost of business operations after the cyber attack.
Cyber extortion defense
The purpose of ransomware is to extort a ransom from the organization in return for the stolen data. Cybercriminals can threaten to misuse the stolen data or encrypt the company’s data thereby preventing access to it. The company may need to pay a steep ransom to retrieve its data from cybercriminals. These losses can be covered by cyber liability insurance.
Once a cyber attack is discovered, an organization needs to investigate the extent of the breach and the vulnerabilities in the system that led to it. These forensic costs that an expert would charge are also covered in cyber insurance policies. Right after the breach, a cyber insurance policy may also cover round-the-clock support from cyber specialists.
When confidential data is stolen it may spiral into legal suits by the impacted parties such as customers. Penalties can be levied by the federal or foreign government for the breach of data privacy. This would require organizations to expend certain legal fees to hire lawyers which are also covered in cyber insurance policies.
Errors and Omissions
When the business operations are disrupted due to a cyber attack the company is likely to fail in fulfilling certain contractual obligations that are time-bound. This inability to deliver a service or a product can lead to legal allegations based on negligence or breach of contract. The legal fees and the associated compensation can be covered by cyber insurance policies.
More than a general liability policy
General insurance policies cover the loss of physical assets, not losses caused by data breaches. Since data is of much more value than physical assets in today’s age, general insurance barely covers the possible losses a company may face in the event of a data breach. Peace of mind and the continued protection of the company’s finances and reputation are achieved with a cyber insurance policy.
Why Mobile Computer Services?
Mobile Computer Services offers a comprehensive array of solutions that take away IT headaches. A managed IT services company in Wake Forest, Mobile Computer Services works with local businesses, overseeing their entire IT infrastructure and operations – from daily IT tasks to long-term strategic technology decisions.
It provides businesses with an assigned, dedicated team of certified engineers who don’t provide the business with just technology but also manage that technology.
Learn more about managed IT services offered by Mobile Computer Services, Inc. at Wake Forest. Call now at (919) 230-2900.