Small to mid-sized business (SMB) owners can take steps to protect their systems from the crippling blow that a cyberattack wields with cybersecurity insurance.
Cyberattacks have unfortunately grown in frequency, and according to Inc.com, “60 percent of small businesses fold within 6 months of a cyberattack. Cybersecurity insurance has become a vital component of any company’s risk mitigation efforts because it can eliminate liability from damages which occur as the result of a cyberattack. This includes ransom payments, regulatory fines, public relations costs to restore your reputation, employee/customer lawsuits, and lost income as the result of a breach.
With the median cost for cybersecurity insurance at $140/month, (price varies per product), many businesses are opting for this insurance coverage. It allows them to continue normal operations without incurring large capital expenditures, while providing significant “peace of mind.” Meanwhile, they can allocate budget for IT and network security improvements, which can be sustainably implemented over time.
While every business that plans operate online would do well to examine cybersecurity insurance, John Kerling, Vice President of UBS summarized,
“If your business collects sensitive data — credit card numbers, account numbers, Social Security numbers or medical records — you’re a likely target for cybercriminals.
Many small businesses assume that hackers are only interested in targeting large companies from whom they can extort very large ransom payments; however, in recent years, those large companies have responded to the attention by investing heavily into IT and cybersecurity.
This is dissuading many hackers from targeting the larger companies with robust defense systems — effectively redirecting many cybercriminals’ efforts towards the “low-hanging fruit” i.e. small businesses who have weak IT infrastructure, but handle valuable data.”
Cybersecurity insurance is an effective solution for SMBs to mitigate risk in the short-term, while they work to build stronger IT infrastructure and improve their long-term cybersecurity. In industries with strict regulation on collected data, like healthcare or finance, this insurance becomes exponentially more valuable.
A few critical stipulations of cybersecurity insurance is that it does not cover acts of which you had prior knowledge before you started your policy, and may not cover interruptions caused by a third-party computer system failure.
“A decade or so ago, most business owners could get away with a cyber-defense strategy of simply hoping their business was overlooked as a target. Unfortunately, that is no longer the case,” said Kerling. “Cyber liability insurance is an extremely cost-effective solution you can leverage temporarily so you can get back to focusing on what matters — growing the business.
While UBS offers IT-related products and services — and we may be cannibalizing additional sales by spreading this message — it’s so important that we can’t remain silent. At the end of the day, our business exists because we want to help our fellow entrepreneurs become more productive. Our larger mission is to support business owners by keeping them in business. SMBs are the backbone of our country’s economy, and we are happy to share our expertise if it keeps even one more entrepreneur up and running.”