For many, cybercrime seems a distant, unlikely risk or a way for insurance companies to make more money. After all, hackers target huge corporations, not small or medium-sized business, right?
Who’s At Risk?
Verizon’s 2018 Data Breach Investigations Report found 61 percent of reported breaches were on small business. Criminals target small enterprises more often, because they have fewer defenses. However, hackers can access any company, regardless of size. Basically, if you store data, your company’s at risk.
Additionally, the number of threats and the severity of attacks increase exponentially annually. Hackers compromise U.S. businesses from anywhere around the globe and aren’t likely to stop. It’s very profitable and impossible to eliminate.
If you operate a small or medium-sized business, you need to understand the risks and the significant costs involved in a cyberattack response and remediation.
Major Liability Concerns
A primary risk after a hack or breach involves the costs surrounding lawsuits. If a criminal accesses personally identifiable information which leads to identity theft, compromised credit, and other major problems, third-parties often sue. Legal fees, court costs, and settlements are usually substantial.
System Restoration & Income Loss
A hack often makes it impossible to conduct business until you repair or replace computers and retrieve lost data. You’ll need to investigate how the criminal compromised your system and strengthen your security to prevent another hack too.
This all takes time and money and seriously impact your company’s income when you need your revenue the most.
Most businesses store personally identifiable data. You may have an email list, Social Security numbers, driver’s license numbers, home addresses, or even medical data. If you store Wage and Tax Statement (W-2) forms or use direct deposit for employees, these are also prime targets for hackers.
If a data breach occurs or you suspect it occurred, Colorado law demands you notify customers within 30-days. If a breach affects more than 1,000 Colorado residents, your company must also notify credit reporting agencies.
Fines & Penalties
If your company’s hacked and it leads to a data breach, you may face fines and penalties for failing to meet compliance. The severity depends on your industry and can be extremely steep, especially if it involves medical or financial data.
NetDeligence estimates the average cost of a data breach for small business at $394,000. No business wants to pay this cost out-of-pocket, but for small or medium-sized businesses it could threaten business continuity.
Don’t Rely on Technology
Since criminals always create new, more sophisticated threats it’s impossible to protect your company through technology alone. Additionally, most standard business insurance policies do not cover cyber events, or offer very limited coverage.
If a criminal accesses sensitive data, your company will bear all the costs mentioned, unless you have cyber insurance. Clearly, this is a huge risk no business can afford to ignore.
Let Young Insurance Group assess your risk and tailor a stand-alone cyber liability insurance policy for your business. It provides the added layer of protection your Colorado business needs against this ever-increasing, diverse risk.
Our company operates in Colorado as an independent insurance agency. We work for you, not the insurers so you receive the best possible insurance product at the most reasonable cost.