Technology Tuesday: Can Cyber Liability Insurance Protect you from Hackers?
All the news you hear about business security hacks comes from the big companies—remember the Target breach from late 2013 and the Home Depot hack a year later? So what does that mean about safety for a smaller business? Cyber crooks don’t really care about the size of the business. If there is money to make by hacking into a business, they’re ready and willing to strike.
If your venture accepts credit or debit cards or electronic funds transfers or collects Social Security numbers, you’re sitting in a dangerous spot, regardless of size. In fact, some hackers may focus on smaller businesses, using the theory that the breach could take longer to discover without a dedicated IT department monitoring transactions.
As devastating as the Target and Home Depot attacks were, it’s worth noting again that they could have been much worse for both if not for their insurance hedges. While Home Depot, recovered $15 million of its loss through insurance, Target recovered $90 million from its coverage. The bottom line: Those losses seem staggering, but they reflect a very small percentage of the annual revenue of each company. That wouldn’t be the case, of course, for a smaller venture, where a $36,000 loss easily could devastate its finances. In fact, nearly 90 percent of breaches affect small businesses.
Cyber risk policies typically cover both your business’ losses and your customers’ losses, including some legal costs, up to your policy’s limit. Right now, many companies continue to take the risk that they won’t be one of the 43 percent of companies that suffer data breaches each year. Less than 20 percent of all large companies carry cyber liability policies, and fewer than six percent of small businesses have it.
According to the Internet Crime Complaint Center, the following states were the most vulnerable to cybercrime in 2014:
– California, with 12.5 percent of the incidents reported to the ICCC.
– Florida, 7.6 percent
– Texas, 6.9 percent
– New York, 5.9 percent
At BB Insurance Marketing, we want to do more than earn your business; we want to earn your trust. The liability and risk exposures stemming from business websites can be tremendous. Online business happens at the speed of light – don’t wait until it’s too late. Contact us to learn more about our Florida insurance solutions and cyber liability coverage or fill out our quick quote form and get a free quote today!