Technology is everywhere, and small businesses aren’t immune from its far-reaching effects. Businesses are relying on computers and storing more data (including customer information) online, so the risk associated with technology has gone up. Hackers can break into a computer system and cause a business to come to a screeching halt through a data breach, a DDoS (Distributed Denial of Service) attack that locks employees and customers out of your website, and cyber extortion (where a hacker takes your computer files hostage electronically and demands ransom.) Commercial general liability insurance will most likely not help you if you have a cyber issue, but cyber liability insurance was designed for the purpose of covering technology-based risks. Let’s explain how cyber liability insurance can protect your business.
What is cyber liability insurance?
To put it in a nutshell, cyber insurance can cover technology-related risks that other types of business insurance don’t. There are quite a few damaging losses related to computers and technology that could befall your business – more than “quite a few” to tell the truth. Cyber insurance can help you cover business interruption expenses that occur due to a hack and the damages that you’re legally obligated to pay. Like we said, cyber insurance is specifically tailored to tech-related risks your business faces. In today’s day and age, managing your business’s cyber liability risks has become increasingly important.
What does cyber insurance generally cover?
Your computers are surprisingly fragile. They’re not as secure and impenetrable as they seem, which is why cyber insurance can help you out of the following pickles:
Cyber can help your business cover costs associated with being in temporary shutdown mode due to a hostile hacker or another cyber incident. It can cover…
- Lost income and profits you would have earned
- Operating expenses (Yeah, still have to pay that utility bill even though your business isn’t doing business)
- Costs of rented or leased equipment
If a hacker steals your customers’ personal information, you may have a legal nightmare on your hands. You’d be responsible for notifying the affected customers, which isn’t inexpensive (not to mention that they’re probably not going to be too happy about the situation.) Then there are the costs of security upgrades and fixes, possibly offering identity theft monitoring to those impacted, and the potential for legal action. Cyber liability insurance would help you with those expenses.
Third-party system damage:
What if one of your employees unintentionally sends an email or file that’s infected with a virus to a customer or vendor and crashes their system? You could be on the book, and you could owe them damages as your legal responsibility. Or what if a software you offer crashes and causes a client to lose income? You could be held responsible. But cyber could help you.
Loss of data or code due to a natural disaster or malicious activity:
A natural disaster, fire, or vandal could cause you to lose valuable code or data. The physical damage to your computer equipment or hardware might be covered under your property insurance or another policy, but not that all-important data or code.
It sounds almost too out-there to be true, but cyber extortion happens – and it’s fast becoming a favorite of cybercriminals. Cyber extortion is when a hacker takes over your computer system and essentially takes your files hostage, either by encrypting them or blocking your access to the computer. They’ll demand payment to return your files. Talk about taking the direct approach. Anyways, cyber extortion is not only exceedingly rude, it can lead to a host of expenses for your business. Those include loss of revenue and rebuilding if the hacker messed with the files or website before you got them back. But cyber liability can swoop in and save the day.
It would be wonderful if our computers were as invincible as we wish they were, but the reality is that hackers are experts at finding weak spots in their defenses. From there, they attack ruthlessly. Before you know it, you have a cyber catastrophe on your hands – a catastrophe that may not be covered under your other business insurance policies. When considering what kind of insurance your business needs, you may want to consider cyber liability if your business relies on computers to store or transmit data and information.
Your Atlanta Insurance agent can help you find the cyber insurance and business insurance you need to protect your business. Every business needs a unique insurance plan, and we can help you create one that’s customized for you. All you have to do to get business insurance quotes is fill out our online form or give us a call today.