In the current age of online technology, cybersecurity is one of the most challenging issues for companies worldwide. Cybercriminals are constantly lurking and trying to find profitable targets for their attacks. While everyone is informed about cyber breaches on large companies like Equifax, Target, and Uber, no one is talking about the importance of cybersecurity for small businesses.
Many small business owners believe their company isn’t big enough or profitable enough to attract the attention of cybercriminals. That’s why they don’t generally invest in advanced cybersecurity solutions or cyber insurance, even though there are plenty of reasons why they should, but more on that later.
However, that couldn’t be further away from the truth. Even though most cyber attacks that make it into news articles are carried out on government entities, financial institutions, and nonprofit organizations, many smaller ones are also on small local businesses. There’s a simple reason: although these businesses might be worth less, they are much easier targets.
With that in mind, here are some myths and facts about cyber insurance for small businesses.
Myth #1: General liability coverage plans include cyber risks.
Commercial General Liability insurance (CGL) protects business assets from property damage claims and bodily injury. These coverage plans are only related to the claims of negligence made by third parties and aren’t designed to cover the financial losses of a third party.
Even though some CGL plans include a small amount dedicated to cyber coverage as an additional premium, these policies typically come with numerous exclusions. They aren’t designed to respond to cyberattacks.
Using designated cyber liability policies is the best way to protect your business from cyberattacks. Affordable cyber liability designations can protect your business at a reasonable price and ensure you’re sheltered from potential attacks.
Myth #2: Small businesses aren’t of interest to cybercriminals.
While it may be true that cybercriminals often target government agencies, nonprofit organizations, international companies, and large enterprises, small businesses are also on the radar. Small business owners don’t believe they have what cybercriminals are looking for but targeting several small businesses is more accessible than attacking one big company.
Over 80% of small to medium businesses fall victim to cyber-attacks. Since cyberattacks can cost a company a lot of money, 60% of targeted small businesses go out of business within six months. With that in mind, a cyberattack can be an incredibly damaging blow to a small business, even more harmful than one directed at a larger company.
Myth #3: Small businesses with low exposure don’t get targeted.
Small business owners generally believe their low-tech network operations aren’t of any interest to cyber attackers who can easily break the security of companies with higher exposure. They also believe keeping a low profile doesn’t lead any cyber attackers to a business.
Nevertheless, even low-exposure and small companies attract the attention of cyber attackers. Many hackers deliberately search for small businesses because they know they’re an easy target with plenty of accessible data.
Having low exposure and using low-tech network operations doesn’t keep small businesses under the radar. Any company that uses technology to store or transfer data is at risk of a cyberattack.
Myth #4: Cyber insurance only covers technology associated with a business.
Another common myth is that cyber insurance is only designed to cover data available online, but that’s not necessarily true. Businesses that don’t have a website often believe they don’t have any exposure that can cause them to become victims of cyberattacks.
However, any soft and hard copies that contain personal information are at risk. That includes personnel and customer files, employment applications, credit card receipts, and other valuable data.
Cyber insurance is designed to cover all possible threads, regardless if a laptop with company data goes missing, a hack is covered, or company files disappear and get into the wrong hands. Cyber insurance policies can cover damages and defense costs related to the loss.
Myth #5: Cyber insurance plans are too expensive for small businesses.
The cyber insurance industry is growing every day, and the number of cyber insurance companies is increasing. As a result, the market quickly became highly competitive, which led to significant price reductions.
Although paying for a cyber insurance plan was a luxury some time ago, that’s no longer the case. Even small businesses can afford many high-quality, reasonably priced cyber insurance plans.
Since small businesses can find cyber insurance plans that give them the necessary internet coverage without breaking the bank, there’s no reason for local and small business owners to pass on getting at least the basic cyber coverage for their company.
As cyber security becomes one of the main challenges even for the largest companies and businesses worldwide, small business owners think they’re in the clear because no one would make an effort to bother them. However, cyber security is a crucial issue everyone needs to work on, including small businesses. There’s a lot of misinformation on the internet, so we’ve decided to uncover some common cyber insurance myths and provide you with accurate facts.