Cyberattacks are becoming a growing concern among small business owners. According to research, 88% of small business owners are concerned about a cyberattack shutting down their business.
Few can access robust and professional IT solutions to stay on top of evolving attacks and avoid becoming victims. Therefore, to mitigate these risks, getting cyber liability insurance is crucial.
Cyber insurance is an insurance policy that protects businesses from the financial impact of a cyberattack or data breach. This policy covers various expenses, such as customer notification, legal fees, credit monitoring, and fines.
Here's what you need to know about retail business's cyber security insurance and how to choose the right policy.
What is Cyber Insurance?
Cyberattacks are among the most challenging attacks to mitigate because of their fast-evolving nature. Cybercriminals are very clever, often using new and evolved techniques to attack an organization's computer systems, cripple operations, and steal data.
This can be in the form of a phishing attack, ransomware, or virus attack.
Cyber liability insurance, or cybersecurity insurance, protects your business from breaches and cyber threats involving your computer data and systems. This includes sensitive employee and customer information such as contact details, credit card numbers, health records, social security numbers, and driver's license numbers.
How Cyber Insurance Works
With cybersecurity insurance, you can recover financially from losses such as loss of business income, fines, and data recovery costs. It also helps salvage your reputation and pay for public relations campaigns and crisis management to minimize the damage to your retail business and brand.
Cyber insurance policies also help you pay IT experts to recover your systems, fix emergent IT issues, and give advice on future steps you can take to mitigate and avoid such an attack.
Once a cyber incident has occurred, you can contact the insurer, have them assess the damage and incident, and start providing coverage for all insured steps to help your business minimize damages and losses and recover from the incident.
What Coverage Do You Get from Cyber Liability Insurance?
Cyber insurance policies cover various types of cyberattack-related issues. These include the following:
Cyber Crime
Cyber insurance covers the financial losses of fraudulent data manipulation, hacking, or a data breach performed by a cybercriminal. This includes the additional fees paid to your telephone service provider to inform affected customers and experts needed to respond to a threat of a pending attack.
Computer System Damage
Cyber insurance policies help cover the costs of fixing damages to affected computer systems in a cyberattack, locating and removing a virus, lost income, and additional expenses.
Cyber Liability
Cyber security insurance policies also help pay for damages to a third party if you fail to protect their data in case of a data breach, you unintentionally transmit a virus or fall victim to an attack such as a denial of service.
Data Breach Expenses
Suppose your retail business suffers a payment card data breach. In that case, a cyber insurance policy helps cover the cost of hiring IT professionals to respond to the breach, inform affected parties and the regulator, and provide support services to the affected parties.
The cyber security insurance cover will also help fund crisis management and public relations campaigns to salvage the brand image and reputation.
The Benefits of Cyber Insurance for Payment Card Data Breach
Getting a cybersecurity insurance policy to protect against payment card data breaches has a lot of benefits for your business. These include the following:
Financial Protection
Payment card data breaches are extremely expensive to retail businesses. They can cost millions of dollars to mitigate, manage, and recover. Cyber security insurance prevents your company from going under due to these huge expenses if you fall victim to an attack.
Your policy will cover direct costs involving system repair and recovery and indirect costs such as loss of revenue due to business disruption and legal fees if the regulator sues you for data privacy violations.
Quickly Restoring Operations
A cyber attack often affects business operations until the attack is stopped and operations are resumed. If you're an online retailer, you have a greater dependence on your IT systems working, meaning a cyberattack can devastate your business.
With a cyber insurance policy, you can quickly respond to a cyberattack and have the resources to restore operations quickly. This ensures business continuity, with unaffected customers using backup systems to continue shopping and accessing your services as a professional team handles the data breach.
How Much Cyber Insurance Coverage Should Retailers Get?
The amount of cyber liability insurance you need depends on your business's specific risks. However, getting a policy with high coverage is crucial for retailers. That's because, if you're processing payment card details, you're likely storing personally identifiable information (PII), which can often result in expensive lawsuits and government fines if the data is stolen.
Coverage with a $1 million per occurrence limit can be sufficient if you handle a few thousand customer records. However, before settling on a policy, it is recommended that you discuss and determine your needs with an insurance agent.
How Much Does Cyber Insurance Cost?
Since the level of cyber insurance coverage needed by a business varies with its unique needs, so do the costs. On average, cyber insurance policies can cost $145 monthly. However, the exact costs will vary based on factors such as your company's network security, exposure to cyber risks, revenue, claims history, and the number of users the system serves.
You should consider two crucial factors when getting your cyber insurance policy for your retail business. These are the scope and coverage limit of the policy and the reputation and financial stability of the insurer.
The policy you settle for should adequately cover all your risks, with adequate limits and low deductibles to reduce out-of-pocket costs. Moreover, the insurer should have a proven track record of handling cyber claims efficiently and providing the needed support during and after the breach.
Consult the Experts
Modern businesses cannot run away from running sophisticated IT systems that are vulnerable to cyberattacks. Consult our experts and learn which policy is the best for you.
Comments