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Why Cyber Insurance Is Essential To Your Small Business Risk Management Portfolio

 

It might feel like cybersecurity risk is only for the big companies; after all, they’re the ones making headlines. But according to the Cybersecurity and Infrastructure Security Agency (CISA), there’s a ransomware attack every 11 seconds — and 43% of cyberattacks target small businesses.

Commercial auto, property and liability insurance are the staples of every business risk portfolio — most owners wouldn’t consider doing business without them. A hack can be just as devasting as a fire. Yet only 17% of small business owners reported having cyber liability insurance (according to a November 2021 study by Advisorsmith).

The expense to restore corrupted computer files, replenish lost income due to business interruption, and pay ransom demands is enough to throw profits into a downward spiral. Add in the cost of notifying clients about the breach, credit monitoring, inevitable lawsuits, federal and state fines, and a tarnished public reputation — and you’ve got a recipe for bankruptcy.

Reboot your risk management portfolio and discover how cyber insurance can protect business income and help you recover after a cyberattack.

Even a minor data breach can ruin your business

If a breach exposes personal data, you could be required to offer free credit monitoring services for one year (or two years if the data is covered by the Health Insurance Portability and Accountability Act). Credit monitoring services can cost $10 to $30 a month per individual, and that adds up.

For example, if you’re found liable for the breach of 2,000 accounts, the cost to comply with credit monitoring services starts at $240,000. Since cybersecurity and data protection laws exist in nearly every state, credit monitoring isn’t something you can ignore. If you have international clients or vendors, your risk just got riskier. Most countries have cybersecurity legislation, which means more penalties and the added complication of international lawsuits.

Even if you manage to escape a lawsuit, the out-of-pocket cost for credit monitoring services and government fines could devastate your business....

Read the full article at the link below.

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