More small and mid-size businesses are catching on to the benefits of cyber coverage, but with the rise of ransomware lingering in the dark, small businesses need to be on their toes with the constantly evolving cyber space.
“The price of insurance has become much more reasonable for small businesses to consider, so we are seeing a lot of growth in that sector,” says Jeremy Barnett, SVP of marketing at NAS Insurance
“The issue that those businesses are facing is with ransomware. It’s a relatively new phenomenon that’s become widespread, and it’s motivating small businesses to consider insurance to help them through that.”
Citing wire transfer fraud as a common and increasing threat to small businesses, Barnett mentions that claims in that space are on the rise.
“Anyone can get ransomware today,” he explains. “So whether you are a sole proprietor or a 5,000-person company, if you are using computers and connecting to the internet, you are susceptible.”
So how can agents help small business clients prepare for a breach in cyber security?
Want the latest insurance industry news first? Sign up for our completely free newsletter service now.
Barnett says that explaining the cost of insurance in the context of the cost of a breach is critical to helping clients understand the benefit of obtaining cyber insurance.
It’s a great time to buy cyber coverage because the cost of responding to an incident is still very expensive,” he says.
Second, ensure that the cyber policy includes a risk management and cyber training solution to give the policyholder a source where they can learn, understand and stay up-to-date with the types of cyber security risks small businesses face.
Lastly, Barnett says that in today’s ever-changing cyber environment it’s important to use an experienced insurer.
“Make sure the insurer is experienced in handling cyber claims and recently because it is such an evolving threat,” he says. “[Clients] must understand that cyber liability is more than just a policy; it is risk management, training and expert claims response. Being quick on the response is paramount to containing the costs of a cyber incident.”
How is cyber coverage evolving?
The rise of ransomware: What should brokers know?