Cyber insurance, being one of the newer forms of insurance, can be hard to understand by business owners that aren’t so tech-savvy.
Insurance provider Jelf
listed the most common excuses why businesses don’t take out cyber insurance and how brokers and agents can shoot down these arguments.
- My business isn’t big enough to be hacked
Even if a business isn’t as big as Sony, it still faces significant risks. While only big cases such as TalkTalk make the news, 74% of small businesses had experienced a data security breach in 2014.
- My IT department or provider says we don’t need cyber insurance
Even if the IT people are confident about their system’s security, there is a term in data security circles known as “Advanced Persistent Threat”. Cyber attackers don’t stand still, so cyber insurance is there to fill in the cracks in security.
- I can’t afford cyber insurance cover
If a firm with 10,000 clients is targeted by a cyber attack, the costs could be significant. A letter to each client to notify them of the breach costs £1.80 each, totalling £18,000 in total. Legal advice may cost £360 per hour, while a data expert tasked with investigating the breach may cost £260 per hour. These aren’t even all the costs associated with a cyber attack, so there’s no doubt cyber insurance is much more affordable
- All my information is safe in a cloud and easily recoverable
While this may true, if hackers get their hands on a copy of the data, they are free to do whatever they want with it. Also, if the cloud vendor/operator is the one targeted by the attack, then it could greatly affect its clients.
- I only hold supplier information on my systems
Information such as business details, addresses, named individuals and email addresses, and invoicing details can be used for fraud if obtained by hackers. Suppliers can also sue a business if their data is stolen, and cyber insurance can cover legal costs stemming from lawsuits caused by a data breach.
- Our website can easily be repaired
If a business uses its website for transactions, then any downtime can affect the bottomline. Client information, when stolen, can also cause a huge PR hit to the company.
- It’s just hackers I need to watch out for
Actually, it’s not just hackers that are a cyber security issue. Human error, such as losing a laptop or a mobile containing client data and passwords, and the resulting public exposure, can be just as destructive.
Cyber liability insurance ensures businesses aren’t just covered for incidents caused by external forces. Customers, data, and even reputation (which is arguably the most valuable thing for a company), as well as a range of internal as well as external eventualities, are also covered.