Why do you need cyber insurance for your small business?

Why do you need cyber insurance for your small business?

February 07, 2023

Businesses with any sort of digital footprint are vulnerable to cybercrime. If you host sensitive data or rely on computers for your business you are at risk. And it’s not just large companies that can be targeted. Small businesses face threats too. Oftentimes they are easy targets because small businesses have less security in place than larger companies. 39% of businesses with 10 – 49 employees experienced one cyber attack according to a study by Hiscox Insurance Group.  Even if that one cyber incident is minor, it can disrupt your business in major ways. 

Cyber insurance can give small businesses peace of mind by providing resources to respond to and recover from cyber security incidents. Cyber insurance for small businesses will typically protect you from damages resulting from hacks and data breaches, including costs related to data restoration, investigation, legal liability and client notification.  

There are a couple of different types of cyber policies for small businesses to choose from to help protect themselves. The type of insurance policy needed will depend on the business size, industry, type of data stored, and risk exposure. For example, first-party cyber insurance protects the company and its assets, while third-party cyber insurance protects the company from others bringing claims against the company. 

Is cyber insurance a requirement to operate? No, but it can help substantially offset your digital security risks. Small businesses should consider cyber insurance as a standard operating cost of doing business in the digital age.

This blog post is not offered, and should not be relied on, as insurance advice. You should consult an insurance agent for advice in specific situations.