Cyber Insurance

Coverage to Protect Your Information, Your Business, and Your Customers

Just the fact that you’re reading this online means you’re connected to a cyber network of some sort. And simply by being online, you’re likely at some risk of a cyberattack.

In fact, digital information, such as your customers’ personal and payment information, is stolen more commonly than physical property theft.

That’s why it’s more important than ever to protect your business with cyber insurance.

With our online quote form, there’s an excellent chance we can provide you with cyber insurance that’s right for your small business.

Just answer a few questions, and we’ll get you a quote in under 60 seconds.

Tattoo artist buying a cyber insurance for his website

What is Cyber Insurance?

Cyber insurance — which is also known as cyber liability insurance — covers the costs of claims associated with stolen customer data, cyberattacks, breaches, and fraud.

A cyberattack often requires a number of responses, which can be expensive and time-consuming. For example, a small business owner may be responsible for:

  • Finding and fixing the breach
  • Notifying their customers
  • Providing credit monitoring for affected customers
  • And more

In many instances, these claims can get expensive. For instance, just figuring out how a cyber attack happened through an investigation could cost between $12,000 and $100,000. Notifying your customers could be another $2,000 to $5,000.

On top of that, there are hidden costs that could affect your business going forward. For example, hiring a public relations firm to help handle any harm to your reputation.

Having cyber insurance can help cover many of those costs (up to your policy limits), helping your small business recover from an event that can often be crippling.

Why Do I Need Cyber Liability Coverage?

When It comes to cyberattacks, small businesses can be big targets.

While large cyberattacks tend to grab a lot of headlines, it’s actually small businesses that are more at risk. Many small businesses don’t have the IT resources and sophisticated cyber defenses of larger companies. That potentially makes them easier targets for cybercriminals.

What Types of Small Businesses Should Have Cyber Insurance?

If your business has internet access and information stored electronically, you could be at risk of a cyberattack and should consider cyber insurance.

As with most types of hazards, the amount of risk often depends on certain factors. You can get a better sense of this by looking at what type of sensitive information you collect and keep on your computer systems.

Cybercriminals often target businesses that collect and store:

  • Customer payment information — credit and debit card numbers
  • Personal identification information — names, addresses, and Social Security numbers
  • Protected health information — patient records, prescription information, etc.

Even if you don’t electronically collect and store customer information, your business could still be in the sights of a cybercriminal. The use of ransomware and denial of service attacks are two other types of cyberattacks that could hurt your business.

Ransomware incidents often require extortion payments to regain control of your information and computer systems. Denial of service attacks can overwhelm your system with too much traffic, which can shut down a machine or system and affect your ability to conduct business online.

Cafe owners discussing which cyber insurance to purchase for their website

What Does Cyber Liability Insurance Cover?

Two types of claims that can typically be covered by cyber liability or cyber security insurance are Enterprise Security Event claims and Privacy Regulation claims. Here’s what that usually means in small business language:

  • Enterprise security event — These events are what many people typically think of when they hear about cyberattacks or data breaches. They often involve your business or customer data being stolen, damaged, or lost. They can also result in a denial of service, where you and your customers can’t access your website or computer system.
  • Privacy regulation claims — If your business is the victim of a successful cyberattack, there may be an investigation by one or more governmental agencies. Depending on the outcome of the investigation, you may be required to pay certain fines or penalties.

Let’s break these events down even further:

Cyber liability insurance can cover the costs of finding and fixing a breach.

If you do suffer a cyberattack, some of the first steps you’ll need to take is figuring out how the hacker got into your system, what data was stolen or damaged, and how to prevent hacks from succeeding in the future.

This usually requires a cyber forensic investigation by an outside examiner. The cost for this can range from $10,000 to more than $100,000, depending on the size of your business.

Cyber security insurance can often cover these costs, up to your policy’s limits.

It can help with taking care of your customers.

The vast majority of data breaches typically affect personal customer data, such as credit card and Social Security information. If a cyberattack results in customer data being damaged or stolen, you may be required to properly notify all affected customers. Some states may require you to provide credit monitoring for a specified period of time.

That can both be time-consuming and expensive. Cyber security insurance policy coverage could help take care of some or most of the costs.

Cyber liability insurance can help if you incur fines and penalties.

If your business handles credit card transactions and there’s a data breach, you could be looking at a variety of fines and penalties. These may include those from the PCI Security Standards Council, payment card associations, government offices, and even your own bank or financial institution.

These fines can be in the thousands of dollars and continue until the source of the breach has been fixed. Having the right cyber security coverage in place can help offset some or all of these payments.

This type of insurance can help with cyber ransom payments.

Not all cyberattacks involve data theft. In some cases, the attack installs ransomware, which makes it nearly impossible to access your business information, and can prevent you from running your operation. Usually, the attacker will demand a payment to return access to your data.

The leading cause of ransomware incidents is “phishing.” Phishing is when hackers use email or text messages to trick you into giving them passwords, account numbers, or other sensitive information.

Let’s say one of your employees responds to what looks like an email from your credit card company. The information provided allows the hackers to install ransomware that locks your computer systems. They demand an extortion payment to unlock them. Cyber liability insurance can help cover the payment to let you get back to operating your business.

Ransomware is gaining in popularity among bad actors online. The average ransomware payout per incident jumped from $4,300 to $8,100 in two years, and is projected to continue increasing. Having a cyber security policy in place could be helpful if you find yourself with no other choice than to pay out the ransom.

It can help with damage to your reputation.

It’s said that bad news travels fast, but good news often goes unreported. What people think and say about your business in terms of personal recommendations and online reviews can play a significant role in your success or failure.

So if you do suffer a data breach from a cyberattack, you’ll most likely want to let your customers know what steps you’re taking to fix the problem and protect their personal information.

For example, there could be a need to add FAQs to your website, draft and issue press releases, or write and send emails to your customers and vendors. Having cyber liability insurance could help you cover the costs of doing that and getting your message out there.

There’s a lot to deal with if you’re the target of a cyberattack. Knowing you have cyber insurance to cover many of the costs, including legal fees, can help you focus on properly addressing the problem and taking care of your business and your customers.

Here’s what cyber insurance usually covers:

  • Crisis management expense
  • Forensic and legal expense
  • Fraud response expense
  • Extortion loss
  • Public relations expense
  • And more

Cyber liability insurance usually does not cover:

  • Potential future lost profits
  • Cost to improve system security
  • Loss of value from theft of intellectual property
  • And more
Cafe owner accepts card payment via phone

How Does Cyber Liability Insurance Work?

Let’s take a look at another example of how cyber insurance works in action.

You receive a number of emails and calls that customers are having trouble accessing their accounts. You soon realize you’ve been hacked and that customer information may have been stolen.

You’ll likely need to take immediate action. This can include determining the cause of the hack and a way to fix it. You also may be required to notify your customers. These steps, and others that may follow, may require hiring professionals to troubleshoot the security issue and ensure proper and timely communication with your customers.

All of a sudden, you have a lot on your plate. If you have cyber liability insurance, the financial impact of handling this crisis doesn’t have to only be on your shoulders.

In fact, cyber insurance could be a vital part of helping your business survive and get back on track.

Is Cyber Liability Coverage Required by Law?

While cyber liability coverage is not required in every state, adequately responding to a cyberattack is. All 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands have enacted legislation that requires businesses to notify individuals of security breaches of information involving personally identifiable information.

As we’ve pointed out, even just notifying your customers can create additional expenses and force your business to grind to a halt. Given that, having cyber coverage in place can help you respond faster and more effectively to both the issue itself and your customers.

Carpenter shop owner buying a cyber insurance online

Why is Cyber Liability Coverage Important?

If you’re running a small business, there’s a very good chance you have a general liability policy (GL). It’s a proven method of protecting your business if the worst happens. It also can make customers more confident about working with you.

There is one big difference you may want to keep in mind between the need for GL insurance and the need for cyber insurance. General liability is there to cover you and your customers if something bad happens.

Cyber insurance is there to protect you from people actively trying to make something bad happen to your business and your customers. As we mentioned earlier, small businesses are extremely attractive targets for cybercriminals.

Plus, you almost always can’t see a hack coming. But with cyber insurance, you’re in a stronger financial position to react, respond, and cover the costs of getting your business back online.

You can think of cyber liability insurance as another layer of protection in your business insurance armor.

Is Cyber Liability Insurance Tax-Deductible?

Much like many business insurance premiums, your cyber insurance premiums may be income-tax-deductible. The IRS considers your insurance policy premiums as part of your business costs, which are typically deductible.

However, you should get advice from a tax preparer or an accountant if you’d like to learn more about deducting your insurance premiums from your specific business’s taxes.

What’s Involved in Getting Cyber Liability Insurance?

While the variety of cyber threats and the complexity of protecting yourself against them can seem overwhelming at times, that’s where we believe we really shine.

We not only provide small business owners with insurance — we help them understand the benefits of having the right insurance. All without requiring them to learn a whole new language of insurance-speak.

We’ve spent a lot of time thinking about insurance and even more time making it easy for you to get coverage. You can start right now with our easy-to-use online quote tool.

In just 60 seconds, we can help you get affordable, comprehensive cyber insurance that works for your business. Best of all, you can do it when it’s most convenient for you.

Along with that very cool technology, we also have licensed insurance agents that can help you. They can answer questions, walk you through the process, and get you insured likely with a single phone call.

Just call 855-869-5183, Monday through Friday, anytime between 8 a.m. and 8 p.m. (ET).

This content is intended to be used for informational purposes only. It is not intended to provide legal, tax, accounting, investment, or any other form of professional advice.

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