Small business owners often assume that cyber threats don’t affect their businesses or operations. After all, most small business owners operate in niche markets with low exposure to big brands or major retailers. There are still many ways that your small business can be exposed to cybercrime without even knowing it.
In addition, when a cyberattack targets a small business and causes financial loss, it can have an even greater impact on the owner’s personal finances. This is why it’s essential for any small business owner to protect their company from cyberattacks. According to Forbes.com 61% of small businesses have reported at least one cyber attack in the past year.
The first step towards protecting your small business from cybercrime is ensuring you have the right cyber insurance coverage. The second is understanding how different types of cyber insurance coverage work best for your unique needs as an owner. Let’s take a look at some of the key benefits of having cyber insurance for your small business and how you can choose the right type of coverage for your company.
What is Cyber Insurance?
Simply put, cyber insurance is a form of insurance that protects you and your business from the financial consequences of a cyberattack. The most common type of cyber insurance for small businesses is general liability (GL) insurance. This type of coverage protects businesses from legal claims. In other words, if you or one of your employees causes a legal claim through negligence, the policy will cover the costs associated with settling the claim. Some other types of cyber insurance include property insurance, data breach insurance, and business interruption.
Types of Insurance for Small Businesses
There are a number of different types of cyber insurance policies available. Let’s take a closer look at some of the most common types of cyber insurance for small businesses:
Property Insurance
This type of insurance protects your assets like computers, furniture, office supplies, and other property. If a covered event causes damage to these assets, you may be able to file a claim and recover some of the associated costs.
Data Breach Insurance
If you store sensitive information like customer information or financial information on the network, a data breach could result in significant liability for your business.
Business Interruption Insurance
This type if policy covers the costs associated with shutting down your business temporarily. For example, if there’s a natural disaster or other type of major disruption that causes you to temporarily close your doors, the policy will help you pay some of the costs associated with closing down the office.
Key benefits of having cyber insurance for your small business
Provides peace of mind
Cyber insurance can help guard your business from significant financial losses caused by a cyberattack. If your computer system is hacked or your website is breached, then having cyber insurance may help cover the costs of repairing the damage and staying open for business.
Cost effective
Many types of cyber insurance for small businesses are relatively cost-effective. With premiums typically taken from a portion of your business income, you can rest assured that a policy will be there when you need it the most.
Prevents lawsuits
Having a policy that covers cyber-related issues can help prevent lawsuits from employees, customers, or other parties who may file lawsuits due to a cyberattack.
How to choose the right type of coverage for your small business
The first thing you’ll want to do when thinking about whether or not you need cyber insurance for your business is to assess the risks associated with your operations. This will help you determine which types of coverage are most appropriate for your needs. Next, you’ll want to take a close look at the financial impact of a cyberattack on your company. While most types of insurance are only moderately expensive, expensive attacks could require you to make significant investments to repair the damage and keep your business running. Finally, be sure you have a clearly defined plan in place for what you will do in case of a cyberattack.
Defensive Strategies When It Comes To Cyber Insurance
While cyberattacks are a threat that you need to take extremely seriously, you don’t want to let them completely consume your time and energy. That’s why it’s important to remember that you have many options for defensive strategies when it comes to cyber insurance.
Keep track of your network traffic
One of the best ways to protect your network from hackers is to keep track of all network traffic. This can be done by using a network traffic analyzer like Network Security Scanner. A traffic analyzer can be used to keep track of all network traffic. This including what programs are running, which ports are being utilized, and what other devices are connected to the network.
Lock down your network
Another important thing you can do to protect your network is to lock down your network. One way to do this is by using strong passwords. These are passwords that are at least 8 characters long and consisting of at least 2 letters, 3 numbers, and a special character.
Keep an eye on your insurance coverage
It’s important to remember that insurance only covers 100% of the cost if you are attacked. This means that if you are only underinsured, you could have a serious financial impact on your business as a result of an attack.
Offensive Strategies When It Comes To Cyber Insurance
Cyberattacks are intended to disrupt your business, not necessarily to cause financial loss. That means that you need to be ready to respond when an attack occurs.
Keep a backup of your data
One of the best ways to protect your data from hackers is to keep a backup of it on a regular basis. This type of backup should be done via an offsite backup service like Backblaze.
Report any suspicious activity
When a hacker attempts to enter your network, you need to report it to your cyber insurance company right away. Doing so will help you to protect yourself from false claims and ensure you are covered in case an attack actually occurs.
Wrapping Up: Is Cyber Insurance For Your Small Business?
Cyber threats are a serious challenge for any business. While the biggest brands and corporations are most likely to be targeted, even small businesses can be exposed to cyberthreats. And, as we’ve seen, these threats can have a serious impact on your business if you aren’t protected against them. That’s why it’s important to get a cyber insurance policy for your small business as soon as possible. With proper coverage, you can relax knowing that your company is protected from the financial impact of a cyberattack. This way you can focus on growing your business without worrying about the consequences of a cyberattack.