Cyber insurance is designed to help a business recover financial losses, and maintain cashflow, after a cyber-attack.
Cyber liability is very complex and high risk. The legal and technical aspects of privacy and data breaches are constantly evolving, and insurance cover, and costs, are changing with it. Insurers are paying out huge claims and cyber insurance is fast becoming one of the most essential insurances for any business, big or small.
Despite being the most vulnerable to a cyber-attack, and the least able to recover, small businesses and sole traders rarely think about cyber insurance. The average small business hasn’t yet even got its head around the importance of basic cyber security, let alone insurance.
It’s essential that all businesses understand the importance of securing their company data, as no business can operate without it.
Will cyber insurance protect my business?
Cyber insurance won’t solve your cyber security issues, and it certainly won’t prevent an attack, or data breach. It’s a recovery tool, not a protection tool. You still need to have the right cyber security in place – but cyber insurance is invaluable if something goes wrong.
Cyber-attacks are the modern-day equivalent of breaking and entering.
If you want to stop a thief from getting in to your physical premises, or stealing your tools, you secure your building and vehicle. Doors are locked, alarms are installed, and you have a professional security service that monitors your premises. Good security practices reduce the likelihood of a B&E.
But a thief might still get in despite your best efforts. Insurance is the backup that helps you recover should something go wrong. As long as they know you have tight security practices in place, they will insure you. Then, if anything goes wrong and tools get stolen, or your business premise is damaged, insurance payouts help you replace everything quickly so your business can continue operating. Insurance can’t stop a disaster, but it does help you recover.
Cyber insurance works the same way. As long as you have the right cyber security measures in place, you should be able to get cyber insurance as a backup recovery tool should a cyber-attack on your business be successful.
Essential security practices are covered in our
cyber security checklist.
Why cyber insurance is worthwhile
The potential value you receive should you need to make a claim far outweighs the cost of premiums.
It’s not just that the insurance policy will cover the immediate costs following a cyber-attack. Good cyber insurance will also take much of the stress and pressure off you.
In addition to cash payouts to cover stolen funds or ransom payments, cyber insurance packages usually also cover a lot of the ‘unseen’ long tail of
costs that a business incurs after a cyber attack or data breach. Costs associated with isolating the breach, recovering data, negotiating ransoms, managing PR and fighting legal battles, for example.
Plus, in addition to covering the cost of these, they have teams of experts on call, so you don’t have to worry about trying to find the right people to help.
But I hate paying out money for insurance!
If this is how you feel, you are not alone. Insurance is something many people hate paying. When you’re not making a claim, paying money for ‘nothing’ can feel painful. But if you do need to make a claim, insurance might be the only thing that keeps your company in business. It changes from being your most hated cost to The. Best. Thing. Ever.
A typical cyber insurance claim for a small business in NZ sits between $50,000 – $150,000 all up, including the long-tail of expenses incurred.
When you weigh up that:
The cost of premiums is far outweighed by the potential return. If you’d put those premiums into your own bank or investment scheme, you wouldn’t have anywhere near enough saved to cover it. The costs to recover are simply too much, which is why 60% of small businesses fold within six months of a cyber-attack. When you understand the risk, it’s easy to see that cyber security and cyber insurance are worth every cent.
Cyber Security
Before you can get cyber insurance, insurers will require you to have the right cyber security layers in place. They need to be sure that you are doing everything you can to stop a cyber-attack from being successful.
That’s where The IT Partners can help. We specialise in cyber security for small businesses and sole traders. Our fully managed
small business cyber security support package has been specifically designed to provide all the layers you need. We use only the best security products, with 24×7 management and maintenance, at a price every small business can manage.
Protect your data now. It’ll reduce the likelihood of a successful attack – which is the goal – and ensure you have the security needed to get cyber insurance, should the worst happen.
Get the right layers of cyber security in place now, before it’s too late.
Contact us today.
