Cyber threats are very real and very scary. Sony Entertainment is the latest victim of a large-scale cyber attack. This cyber attack might be the largest in US history and will cost Sony millions in lost revenue and litigation. Fortunately, Sony was wise enough to purchase a $60M cyber liability and data breach insurance policy. Unfortunately, $60M of coverage will likely be inadequate to address the scale and scope of the Sony data breach.
Many small business owners assume that they are immune to a data breach simply because of their size. After all, why would hackers target a small business when there are bigger fish in the pond? Because, as Symantec reports, small business owners tend to have weaker security protocols, making them an easy target for hackers.
The statistics regarding small business and data breach are eye-opening:
- A 2012 study by Verizon found that 71% of cyber attacks are direct at firms with less than 100 employees
- Small business employees cause over 20% of small business data breach losses (i.e. employees accidentally release confidential information online).
- Most small businesses are completely unprepared for a data breach. As a result, up to 60% of small firms go out of business within 6 months of a data breach
Small Business Needs Cyber Liability Coverage
The bottom line is that small business needs cyber liability coverage. If you store customer information that is considered “personally identifiable information” you have a legal responsibility to protect it. Every state, including Nevada, has established laws that require business owners to protect customer information. Failure to protect this information subjects the business to fines, penalties, and civil liability. Your business may also store proprietary information that should be protected from hackers. This may include trade secrets, marketing plans, blueprints, product information and internal emails or other communications.
Cyber Liability Insurance is Affordable
At one time cyber liability and data breach insurance were difficult to find and expensive. That is simply no longer the case. Nearly every major business insurance provider now offers cyber liability insurance. Many times the coverage can be added to an existing small business policy by endorsement. Or, for mid-sized businesses that require more tailored coverage, we can offer stand-alone cyber liability and data breach insurance with CNA, Hartford, and Philadelphia.
Don’t wait for a cyber attack to occur before purchasing cyber liability and data breach insurance. Contact the experts at Safeguard Insurance today for a no-obligation quote.