Why should I buy cyber insurance as a small business owner?
December 11, 2020
Everyone should be cautious about cyber-security, especially small business owners, as we have become increasingly reliant on digital platforms in many commercial operations. Cyber risk can affect a business’ clients, employees and volunteers. Many small businesses have limited resources for cyber-security. It doesn’t matter what type of business you own, big or small, if you store client information online, you need cyber liability insurance.
What type of information can be compromised?
Information that can be stolen includes:
Credit card numbers
Debit account number
Bank account information
Health care information
Social insurance numbers
Driver's license information
Cyber risk types
Terms such as “cyber-attack,” “data breach,” “data compromise” and “identity theft” are sometimes used interchangeably, but the losses, affected parties and definitions are not the same.
A cyber-attack is an intentional, malicious attack on a computer system or network and includes hacking, denial of service or malware.
Data can be stolen, made public or lost.
Identity theft is the use of someone's personal information to commit fraud or another crime. It can be used to obtain loans, credit cards and contracts in the person’s name.
What can a cyber-crime against your business mean for you?
The consequences of cyber-crime can be devastating for your business and can even force you to file for bankruptcy or close your business depending on the severity of the cyber-security breach.
Installing better security requires software, personnel, infrastructure and training your staff and can be very expensive.
Businesses that have suffered a cyber-security breach lose profits if they were to close down temporarily to investigate and also from the accompanying loss of customer confidence.
Some businesses never recover from cyber-security breaches. Due to stolen resources and the expense of dealing with the breach, the losses can be too much for any business to bear without cyber insurance. Even so, the bigger the business means more exposure to cyber attacks and increased possibility of never recovering.
How does cyber insurance help?
Cyber insurance covers your business should you suffer a data breach or cyber-attack. It covers expenses like lost revenue, crisis management, investigation, customer notification and credit monitoring.
What can you do to protect your business from cyber risk?
Talk to your insurance advisor to determine your exposure and vulnerability to a breach and to obtain the cyber insurance that will best meet your business’s specific needs.
Western Coast Insurance Services Ltd. is a wholly-owned division of Western Financial Group Ltd. Insurance products are underwritten by certain licensed insurance companies and are only
available throughout British Columbia, Canada.