Cybersecurity Insurance: Why Every Small Business Needs It

Business risk profiles are constantly changing and evolving. Even if your company hasn’t changed much in recent years, the world around it has. Various workplace trends and industry patterns can require your organization to adjust its operations, but these changes also require a reassessment of risk management and loss control efforts. That’s why you can’t overlook cybersecurity insurance in an increasingly digital world.

What Is Cybersecurity Insurance?

Also referred to as cyber liability insurance or simply cyber insurance, these policies can address various digital threats, data breaches and intellectual property issues. If your organization is the subject of a phishing attack, malware infection or other cyber incident, you may accrue various losses and unbudgeted costs. In response, your cybersecurity insurance policy may issue a payout to assist with resulting losses and expenses.

What Can My Policy Cover?

In the wake of a covered cyber incident, you can submit a claim for financial assistance. If approved, your payout can help your company afford and manage various costs and damages. Exact coverage parameters may vary, but you may often receive financial aid for the following:

• Incident response costs, such as hiring a public relations firm or IT contractors

• Business interruption losses, including recouping lost income due to delays

• Noncompliance fines, such as those issued by regulatory agencies if you did not have appropriate cybersecurity measures in place

• Legal expenses, including attorney fees, settlements and judgments arising from lawsuits

Is Coverage Required?

Cybersecurity insurance is generally not required by law, but businesses in certain industries or that work with specific types of data (e.g., health records and social security numbers) may be expected to have coverage. A suitable policy can be particularly crucial for small businesses, which may lack financial resources to fall back on when needing to pay for the unexpected costs of a data breach. These companies have also become increasingly frequent targets of cybercriminals in recent years, whereas perpetrators may have previously focused their efforts on larger enterprises.

We’re Here to Help

At KJE Consultants LLC in New York, New York, our knowledgeable and experienced team can help you and your small business understand and secure appropriate cybersecurity coverage. Contact us today to learn more about your options or get a cybersecurity insurance quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.