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Why Businesses Need Cyber Insurance

Small-Business-Owner-Key-Life-Insurance-Blog-Post

If you run a small business, you probably have insurance to protect your money. You might have insurance for your building or your employees if they get hurt. But what about cyber insurance?

Most small business owners worry about cyber fraud, but not many have cyber insurance. This is a big deal because ransomware attacks, where hackers hold your data hostage, have gone up a lot. Last year, the average demand for ransom money nearly tripled, from $450,000 to $1.2 million. So, it’s a good idea to think about getting cyber insurance to keep your business safe.

Before diving deep into the article, let’s have a look at what cyber insurance does.

What does Cyber Insurance Do?
Cyber Insurance helps before and after a cyber attack happens. Before, it might give you tips on how to stay safe online and set up suitable security measures. After, if you get hit by a cyber attack, it can help cover the costs and guide you through the crisis.

When you get cyber insurance, the people who give you the policy might help you make your business more secure. They can find weak spots, suggest safer ways to do things, and help you be ready in case of an attack.

If you do get attacked, cyber insurance can be a significant financial help. It could cover a lot of the costs, making it easier for you to recover from the attack.

Benefits of Cyber Insurance
Now, let’s dive deeper to explore the benefits of cyber insurance.

1. Protection Against Financial Losses
Cyber attacks can cause significant financial losses for a company, including social engineering losses (initiated by thieves pretending to be authorized parties) from inside or outside the corporate email servers, invoice manipulation losses, forensic investigations, loss of income from corporate systems being locked up, loss of revenue arising from outsourced cloud / IT providers being down, data restoration costs, legal liabilities, regulatory fines and penalties, ransom payments and more.

2. Assistance with Incident Response
When a cyber incident occurs, time is critical to mitigate loss. Cyber policies regularly provide preferred access to incident response services, including forensic investigation, public relations, facilitating ransom payments in cryptocurrency, and legal services. Amwins has access to a suite of carrier-provided services at a highly discounted rate or, in some instances, free of charge.

3. Protection Against Reputation Damage
Cyber attacks can also damage a company’s reputation and erode customer trust (especially for financial institutions and other custodians of customer assets). Cyber policies may include coverage for public relations and crisis management expenses.

4. Compliance with Regulatory Requirements
Many industries are subject to regulatory requirements related to data privacy and security. Cyber policies can provide coverage for regulatory investigations, fines, penalties, and legal assistance and support to ensure compliance with all the applicable regulations in the event of a privacy incident.

5. Third-Party Liability Coverage
Cyber attacks can also result in liability claims from customers, vendors, employees, or other affected third parties. Cyber policies can provide defense and indemnity coverage for these types of claims.

6. Contractual Requirements
When businesses enter into contracts with each other, they are expected to see cyber insurance as a required purchase under the insurance provisions. It is critical to make sure that the policy purchased actually provides the coverage necessary.

Final Thoughts!!
In simple terms, cyber insurance is like a safety net for your business in the digital world. It helps protect you before and after a cyber attack by giving you advice on how to stay safe online and covering the costs if you are breached. With cyber attacks becoming more common and damaging, having cyber insurance can be a lifesaver for small businesses. So, if you want to keep your business safe and secure, it’s definitely worth considering getting cyber insurance.

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