February 23, 2022

Why Does Your Small Business Need Cyber Insurance in 2022?

Hackers can attack any business, small or large. The risk of a data breach for small businesses is common because they are easy targets for criminals. However, many small business owners don’t protect their business’ important assets with cybersecurity and insurance, resulting in 60% of them going bankrupt after a hack.

Data theft is the common type of attack that small businesses encounter. Cybercriminals steal payment and credit card details or customer information, then either return the data in exchange for a ransom or use the information for illegal acts. In any condition, your business bears the consequences of losing money and customers.

A cyberattack can put any company out of business. Even if the business stays afloat, the recovery process can be time-consuming and inconvenient, with the average cost of a data breach totaling $3 million. Therefore, it’s essential for any business to stay protected with cybersecurity and cyber insurance.

What is Cyber Insurance?

In the case of a cyberattack, cyber insurance handles incident response expenses, recovery costs, and business interruption loss. It helps cover your business from potential liabilities, including:

·      Lost income

·      Recovery of stolen data

·      Expenses from damaged computer systems

·      Notifying customers about the hack

·      Options to identify cybercriminal

Why Does Your Small Business Need Cyber Insurance?

1. Get compensated on income loss

After you get hacked, your business may be unable to operate as usual, as you may lose access to your device, data, accounts, and email. This means lost revenue and customers. Even worse, it may take a while for you to recover from the attack, prolonging the costs of business interruption.

This is where cyber insurance can help. For the income loss that you experience during and after the attack, you can get refunded up to your coverage amount.

2. Help repair and restore your devices

In case of a breach, cyber insurance covers the cost to repair and restore your software and systems with network and information security liability coverage. This coverage offers protection against unauthorized access to software or devices. If the breach results in system or software failure, cyber insurance will cover the expenses of getting the software and devices back up and running.

3. Minimize legal expenses

Most businesses require legal assistance to deal with a cyberattack. If you hire a legal advisor without insurance, the costs may be significant. If you want to secure your business as well as lower legal expenses, you will need cyber insurance for your business. Many cyber insurance policies include legal support to reduce the financial burden on small businesses.

4. Support on forensics audit

Forensics auditors are needed to help investigate the cause of a breach and what exactly was lost. This investigation will help you identify the threat and counter the attack. Cyber insurance can help you cover the costs of an investigation.

5. Cover costs to notify customers

When a business gets hacked, law enforcement agencies require businesses to report the breach to customers.Informing every customer can be expensive, adding to your already significant recovery costs. Cyber insurance for small businesses covers the cost of notifying customers about a breach. What’s more, you’ll also receive referrals to law firms who act as breach coaches or counsel.

If you don't want to pay the expenses above out of pocket, you will need cyber insurance for your business. 1Fort is the only solution where you can set both insurance and all the security needed in just minutes.

Get started on 1Fort today and start protecting your business from these costs.