Cyber insurance protects small businesses from damage, liability, and recovery costs in the event that a company’s computer system or electronic data has been compromised. Alternatively referred to as cyber liability insurance, cyber risk insurance, or cybersecurity insurance, this type of coverage protects small businesses and their employees and customers from computer hackers and other electronic threats.
If your small business handles any sensitive information, such as your employees’ drivers license and social security numbers or your customers’ credit cards or bank account information, you could be a target for nefarious criminals. Cybercriminal activity is only increasing over time, and adequate cyber insurance coverage is one key step in guarding your valuable and confidential information.
If your computer data is exposed or stolen, you may be protected from liability with a commercial cyber insurance policy.
How does cyber insurance protect small businesses?
Identity Theft & Cyber Extortion
- Helps protect small businesses and their employees and customers in the event of identity theft
- Assists with the release of personal data if a small business is the victim of cyber extortion
- Helps protect the small business from lawsuits related to a cybercrime
- Helps with costs to recover lost data
What’s typically covered by cyber insurance?
Cyber insurance policies vary depending on your small business needs. Common types of cyber insurance are:
First-party coverage helps you with expenses if your data is stolen or your network is hacked
- Recovery – helps cover the cost to restore lost data due to damage, theft, or corruption
- Notification – helps with the cost of letting employees, customers, and governmental regulators know about a breach
- Credit monitoring – assists with services to monitor credit for affected parties
- Forensics – helps with expenses for legal and forensic services related to the cyber event
- Crisis management – helps with public relations and advertising to reestablish the company’s standing
- Business interruption – helps cover lost income and/or expenses to keep the business running
- Cyber extortion loss – helps pay ransom, damages, and legal expenses
Third-party coverage protects you if you’re sued in the event of a cyber crime
- Network privacy – helps if the small business is sued for not adequately protecting private, sensitive data of employees or customers
- Network security – helps if the small business is sued for action or inaction surrounding a data breach or network access issue due to a hacker, virus, or malware
- Errors or omissions – covers coding mistakes and software errors related to any professional services provided
- Electronic media – helps in the event the small business is sued for slander, defamation, libel, infringement, or other issues related to data published on the internet
What other types of insurance might my small business need?
While cyber insurance helps protect small businesses in the event of a cyber crime, small business owners should consider other types of insurance:
Workers’ compensation insurance provides medical, disability, survivor, burial, and rehabilitation benefits to employees who experience illness, injury, or death due to a work-related incident. In nearly all states, and with few exceptions, businesses are required by law to carry workers’ compensation insurance. Get a workers’ comp quote in 3 minutes.
Commercial auto insurance helps cover liability and physical damage for vehicles owned by your company.
General liability insurance helps protect your small business against third-party claims of bodily injury, property damage, or personal injury.
Business owner’s policy (BOP) insurance offers bundled protection from claims related to property damage, fire, personal injury, advertising injury, and other issues.