Cybercrime has shot up by almost 300% since the start of the pandemic, and that’s why you must adopt necessary measures to protect your business from malicious cyber players. One of these measures is to have Cyber Liability Insurance (CLI).
Cyber Liability Insurance (CLI) covers the financial loss that results from cyber events such as data breaches. However, cyber liability is not typically included within general liability insurance and must be purchased separately. Also, each company offering a policy has different coverage options available and exclusions included.
Why Invest in Cyber Liability Insurance?
Experts estimate that the damage inflicted by cybercrimes will add up to about $6 trillion globally in 2021.2 That’s higher than the GDP of the world’s third-largest economy, Japan, which sits at $5.38 trillion.
These statistics stress why SMBs in particular must have cyber liability insurance:
- Over 40% of cyberattacks target small businesses.
- Over 60% of SMBs have experienced a cyberattack in the past 12 months.
- Over 45% of SMBs say that their processes are ineffective at mitigating attacks.4
Having cyber liability insurance could be the difference between your business sinking or staying afloat after a security incident. Without cyber liability insurance, the various expenses you might have to bear after an incident could financially harm your business in the short term or, in the worst case, result in permanent closure.
Here are a few expenses that a business would have to manage following a severe data breach incident:
- Cost of downtime
- Cost of investigation
- Cost of recovering data
- Cost of legal procedures
- Cost of notifying stakeholders about the incident
- Cost of restoring the personal identities of those affected
Good cyber liability insurance would usually cover these expenses. But always remember that before you commit to a policy, you must get clarity from your insurer about what they do and do not cover.
Does your business need it? Any venture with cyber exposure must consider having cyber liability insurance. However, if your business handles or stores sensitive information online, such as electronic protected health information (ePHI) or personally identifiable information (PII), cyber liability insurance should be your top priority.
If you're not sure where to start when it comes to Cyber Liability Insurance, schedule a call with us! In this 15-minute intro call, we will get to know your business and needs, then connect you with one of our senior techs to help provide you with the guidance and advice you need to apply for Cyber Liability Insurance!