There’s a good chance your goals for 2013 don’t include a devastating financial blow from a data breach– and we certainly hope such a blow doesn’t hit your business. But we need to warn you: a study conducted by the U.S. Secret Service and Verizon last year found that a whopping 72 percent of all data breaches happen to small- and medium-sized businesses.
The average cost of those data breaches? More than $5 million – not something most people could cover with petty cash.
Luckily, there’s a simple way to make sure your assets are safe in a world of tablets, smart phones, and cloud computing, which provide hundreds of access points to your sensitive customer data: cyber liability insurance.
Already covered? Great. Never heard of cyber liability? That’s okay. Here are key questions to ask your insurance agent to make sure your business is fully protected in 2013.
Cyber Liability Insurance Questions to Save You Time and Money
- How do I know if I need cyber liability insurance? If you store any sensitive data from your clients (e.g., addresses, social security numbers, credit card numbers, etc.), you probably need cyber liability coverage. That’s because general liability policies typically only protect “tangible” assets, and data is considered intangible. In addition, if you plan to work with government clients this year, chances are they’ll require you to have cyber liability insurance.
- What will my insurance cover? That depends on the policy you choose. Some policies cover the expenses associated with business interruption from hacking incidents; others cover the legal costs associated with a data breach. Your agent can help you determine what you need and find a policy that offers the best protection.
- How can I lower my cyber liability costs? Good news: by implementing some basic cyber security measures (including using antivirus software, installing firewalls, and updating passwords regularly), you may be able to qualify for discounts in your coverage. That’s because such security measures lower your overall vulnerability to attacks.
- How often should I update my policy? Unlike more general liability insurance, cyber liability insurance is a new and quickly evolving product. Be sure to ask your agent whether changes to the tech scene (or your business) in the coming year will affect your policy, and whether you’ll need to update it within the year.
- What’s my risk level if I choose to go without coverage? That depends on your industry and the kind of work you do. While there’s a chance you don’t need cyber liability coverage at all, most tech professionals require at least basic protection.
Cyber Liability Bonus: Win Clients by Flaunting Your Protection
Naturally, investing in cyber liability insurance provides you both peace of mind and financial security in the event that you’re victimized by cyber crime. But because only about 35 percent of businesses carried cyber liability coverage last year, having this protection offers another benefit: you can use it as a differentiating factor for potential clients.
By demonstrating your commitment to keeping their data secure, you present yourself as a savvy, informed business partner. And who doesn’t want to work with someone like that?
Sources: http://www.forbes.com/sites/rajsabhlok/2012/10/18/do-you-really-need-cyber-liability-insurance/
http://businessinsure.about.com/od/liabilityinsurance/a/Cyber-Liability-Coverage.htm
Writtten by Brenna Lemieux - check her out at Google+ or Twitter