When it comes to ways to protect small business’ growth, the first thoughts that come to your mind are probably about knowing your customers, being aware of your competition, minimizing your expenses, and other important, but traditional growth-related concerns, which are all well and good, but in today’s digital world, no longer enough. Today, what you also need is cyber liability insurance. Although, if you thought your small business didn’t need it, you’re not alone. There are plenty of small business owners that think they don’t need cyber insurance, or don’t even know it’s a thing. However, cyber liability insurance most definitely is a thing and small businesses most definitely need it, especially when you consider that 60% of small businesses that are victims of a cyber attack go out of business within six months of the attack.
So what exactly is cyber liability insurance?
Generally speaking, cyber liability insurance provides coverage to your business in case of a data breach or other type of cyber-attack. It first emerged on the market in the late nineties, but at that time was limited in the scope of the risks it covered. Since then, it has evolved and broadened its coverage dramatically. Today, cyber liability covers such cyber risks as business interruption, systems failure, hardware and software damage, cyber extortion, reporting breaches to customers, third-party damage claims, and more.
This is all great news for businesses as cyber threats represent one of the biggest challenges to maintaining and growing a business. It’s not surprising, then, that while many businesses might think they don’t need cyber insurance, many more think they do: csoonline.com tells us that 62% of organizations plan to increase their cybersecurity spending in 2020. Moreover, businesses are increasingly viewing cyber insurance as a necessity. According to a major cyber insurance brand, 73 percent of firms plan to purchase cyber insurance, a clear indication that the majority of companies acknowledge how risky it is to operate without it.
Small businesses are no exception; they’re following a similar pattern, both in cybersecurity spending overall and in cyber insurance spending. Channelfutures.com recently reported that 62% of small-and-medium size businesses will grow their cybersecurity budget next year. Furthermore, interest in cyber liability insurance among small companies is increasing rapidly too. This isn’t just out of concern for the survival of their businesses either. It’s also because an increasing number of large organizations won’t do business with smaller companies unless they have cyber-related insurance.
Even more good news is that cyber liability insurance doesn’t just protect businesses from cyber risks. It also helps protect business growth. Here’s how:
- Cyber liability insurance provides an added layer of protection for your business by making sure you don’t lose substantial amounts of money due to a cyber attack. Losing substantial amounts of money could halt business operations, or worse cause you to go out of business. The added layer of protection protects your business from these types of outcomes, so you can continue to operate and grow your business even if you are attacked.
- A cyber-attack can shut your systems and your business’ website down instantly, leaving your business without the ability to generate revenue and putting it at risk of losing customers because you can’t provide the services you promised. Cyber liability insurance can help recover compromised data, repair damaged systems and get your business back on its feet more quickly. A recent survey by the insurance industry found that 97 percent of the small business owners surveyed who had cyber insurance and were hacked said that their coverage was good enough to get them up and running again.
- You can’t grow your business without client or customer trust and one of the most common customer complaints after a company has been breached is that it failed to keep affected customers informed of the breach. Cyber liability insurance helps cover the cost of informing clients and customers, and therefore can help restore and maintain a business’ customer confidence levels.
- Most cyber liability insurance policies require that businesses maintain certain cybersecurity standards in order to qualify for the insurance. Those standards help establish an excellent set of guidelines and cybersecurity best practices to follow that can help you protect your business.
- Cyber liability insurance allows business owners to focus on doing what they need to do to grow their business, rather than limit themselves because of fear of cyber-attacks. It lets them take the right risks to grow their business while avoiding the wrong risks.
Challenges, cyber insurance, business growth
The first line of defense against cyber-attacks for any business, large or small, is a powerful cybersecurity program; it is a vital first layer of protection that no business can do without. Cyber liability insurance is the added layer. It is the layer that augments and supports the first layer, and helps businesses owners feel safe so that they are able to focus their efforts on growing their business.