More than half of businesses in the US have cyber coverage, but many businesses still procrastinate on obtaining the coverage they need.
Many decision-makers make the mistake of thinking ‘it won’t happen to us’ – but cyber breaches can happen to businesses of all kinds.
The industries that seem to have the best coverage include healthcare, educational, and hospitality and gaming.
There are many industries that still don’t seem to prioritize coverage, including the manufacturing industry – just 8% of businesses in this industry have coverage.
You might struggle to see at first why a manufacturing business needs coverage, but they do.
Every organization is at risk of a data breach, whether that be a malware attack, system hack, or something else.
Cybercrime and risks is one of the top concerns of businesses, so it begs the question of why decision-makers are not rushing out to buy the coverage that they need.
What Is Cyber Coverage?
Cyber coverage is a form of insurance that can protect your business from many issues online, including data breaches and leaks.
Big businesses like Sony and Equifax have suffered breaches in the past, so no business is safe.
Smaller businesses may think they won’t be targeted, but cyber hackers don’t discriminate.
When a breach occurs, it can cost a business a lot of money. There’s downtime to consider, and a list of expenses you will need to fork out for.
You will have notification expenses, and may even need to deal with cyber extortion where you must pay a ransom to hackers.
Legal expenses will also need to be taken into account, as customers will have the right to sue your business. This will cost you a large sum of money if you are liable to pay out.
Although all businesses can be at risk of a data breach, certain industries do seem to be more under threat than others.
In the first half of 2018, for example, 309 of the 688 reported breaches impacted business while 181 hit medical/healthcare organizations.
Banking, credit, and financial organizations were the top 3, with 84 breaches, and then government/military completing the 5 top targets with 49 and 45 breaches.
Here’s a list of some types of businesses that should consider cyber coverage:
Larger businesses can have the infrastructure in place to deal with cyberattacks, but smaller companies may lack the resources.
In April 2017, it was reported that someone had hacked approximately 14 million small businesses over the preceding 12 months.
As we mentioned before, cybercriminals do not discriminate, so keeping your small business safe should be a priority.
Retailers are particularly vulnerable to attack since they have customer card information and other sensitive data.
High profile attacks like those against Target have driven up the prices of cover and made affordable coverage with the appropriate limits hard to find for many.
Businesses that sell their products online need cyber coverage.
This coverage protects sellers from claims arising from cyber and data liability as well as provides an important support system if you experience a security breach.
Healthcare professionals and medical organizations tend to access and store healthcare records that can contain personal and sensitive information, plus financial details.
An attack can devastate operation and put a serious spanner in the works for patient care.
As the industry has strict compliance standards, they aim to detect exploitable vulnerabilities.
Healthcare entities must have their systems locked down to facilitate HIPAA compliance and protect electronic protected health information (ePHI).
Many manufacturers believe they are safe from cyberattacks because they don’t have large amounts of sensitive data.
However, financially motivated cyber attacks can still take place, like funds transfer fraud. Manufacturers shouldn’t just worry about data breaches.
Types of Cyber Damages
It’s important to note that all businesses rely on data, so no matter what industry you are in, cyber coverage will be essential.
Certain industries may be more prone to attack, but that doesn’t mean your business is safe. You have the following cyber liabilities to consider should you fail to get insurance:
- Third-party damages – there are a few examples of this, just one is transmitting a virus to another company or a data breach for companies responsible for protecting or maintaining data.
- Cyber extortion – hackers take control of your websites and networks and demand payment. This can result in significant financial loss and will affect how you conduct business.
- Data breaches – companies must protect personal information from both employees and clients. Data breaches can occur through hacking, loss of laptops, unauthorized employee access, and more.
- Intellectual property – social media can create exposure for businesses, resulting in liability.
Purchasing Cyber Insurance
You should now see how important this coverage is – but how do you go about purchasing the right level of cover for your business?
- Stick to basics – you should know what you need and buy coverage to suit.
- Be wary of broadly worded exclusions.
- Determine the appropriate limits of liability – you’ll need to figure this out so you can get the right level of coverage.
- Obtain coverage for vendor acts and omission – some of your data may be stored with a third party vendor, and your policy should account for this.
As all businesses rely on data, obtaining cyber coverage no matter your industry will ensure complete protection.
Along with protecting your business, customers will have peace of mind and you will be able to get back up and running as soon as possible.
Cyber coverage must be an integral part of any business strategy if you truly want to keep your business safe in 2020. Contact us to find the right policy for your needs.