Data breaches and other cyberattacks, like ransomware, are unfortunately becoming all too common, and the pandemic has made things even worse for businesses.
Cybercrime skyrocketed 400% during the midst of the pandemic and numbers are up for ransomware and many other types of attacks. Companies in Framingham and around the country are increasingly becoming victims despite trying to put IT security protections in place.
63% of small & mid-sized businesses have experienced a data breach in the past 12 months.
Most small businesses have regular business insurance to cover certain losses, but that’s not always adequate when it comes to a cyberattack. Costs can often go outside what’s covered. There are lost reputation costs, cost to repair the breach, notification costs for those whose information was compromised in the breach, and the list goes on.
Cyber insurance is designed to cover those specific costs that are tied to a cyberattack, so businesses don’t suffer devastating consequences.
What Are the Typical Costs in a Cyberattack?
As many as 60 percent of small businesses have to close their doors within 6 months of a cyberattack due to the costs. Many businesses don’t realize how expensive just one ransomware or spyware attack can be until it’s too late.
So, they don’t pay enough attention to cybersecurity safeguards or have the right type of insurance to protect themselves. Just about every smart business owner has insurance against a fire, but not a cyberattack, yet it can be just as devastating financially.
Here are some of the typical costs associated with a data breach or other cyberattack:
- Immediate incident response
- Lost productivity
- Costs to implement security to fix the vulnerability
- Lost new business
- Loss of existing customers
- Court costs if sued
The average cost of a data breach according to IBM security is $3.86 million. And if you think because you have a small business that “hackers wouldn’t bother with me,” you’d be wrong. Approximately 43% of all cyberattacks are targeted at small businesses.
There are several reasons that cybercrime has become even more dangerous over the last year and why businesses are being hit in increasing numbers.
- The Pandemic: Hackers are having a field day with the disruption of the pandemic and the move to remote workers, often working on much less secure networks.
- DIY Hacking Kits: Someone doesn’t even need to know any code to perpetrate a phishing attack on a small business to grab some data they can then sell on the Dark Web. Hacking kits are already out there being sold allowing even a novice to deploy an attack.
- Criminal Cartels: The criminal cartels are getting involved in digital crime, like ransomware, institutionalizing it in a way that makes it more dangerous and more prevalent.
The Benefits of Cyber Insurance
Cyber insurance came about because of how common data breaches and other cyberattacks are becoming and due to how devastating they are. Just like an incident that causes physical damage to a business, a successful digital attack can take a business out of operation for days.
Those point-of-sale systems that make it easy to take debit and credit card payments anywhere can also be a source of stolen data, leaving a company liable to customers who may suffer identity theft as a result of a breach.
According to Nationwide, a general liability insurance policy will generally cover things like bodily injuries and property damage, but cyber incidents are often excluded, which is why separate cyber insurance coverage is needed.
Here are some of the ways that a cyber insurance policy protects a business in the event of a breach or other type of attack.
Breach Notification & Monitoring Services
When your customer data is breached in an attack, you have to not only notify those impacted but also have a plan on how you’re going to help rectify the situation. Most companies do this by offering free credit monitoring services for a year or more.
Cybersecurity insurance includes covering the cost of notifying customers of a breach and the monitoring services needed to help protect the personal information of those affected.
Forensic Help Identifying & Fixing How the Breach Happened
It’s vital to understand how a breach happened so you can keep it from happening again. This can involve painstaking cyber forensics, which can cost you quite a bit, especially if you have an emergency situation.
The cost of IT consulting and forensics to identify and resolve the cost of the breach are also included in your cybersecurity policy.
Data Recovery Costs
In the event of a ransomware attack, data can often be lost. This may mean expensive downtime if it’s not recovered quickly to restore business operations to 100%.
Cyber insurance covers the costs of having an expert go through data recovery operations in the event any data was corrupted or lost during a cyberattack.
Defense Settlement Costs
Businesses that have a data breach can often get sued by those whose data was compromised. Another important coverage included in most cyber insurance policies is the cost of defense and settlement costs if you’re sued for failure to prevent unauthorized access to data in your care.
Get Expert Help With Cybersecurity Safeguards & More
Pro Tech Guy can help your business put systems in place to protect you from a breach as well as offer immediate assistance should you suffer a cyberattack.
Contact us today for an IT consultation. Call 508-364-8189 or reach us online.