Use These Tips to Sell Cyber to Your Clients
Cyber insurance is becoming more and more important as businesses of all sizes face growing cyber threats. Despite the prevalence of cyber attacks, only 21% of small businesses and 58% of large businesses have standalone cyber insurance, according to Hiscox, a leading insurance provider specializing in small business insurance and niche markets. Brokers and agents are positioned to close this gap and express the importance of cyber insurance in the digital age.
The good news is, you don’t have to be a cyber expert to sell cyber insurance. At ProWriters, we’ve broken down what you need to know to make the case to your clients. Learn how to best sell cyber insurance to your clients with these tips from our cyber experts.
Communicating the Costs of a Cyber Incident
All of the attacks listed above come at a cost to your clients. The small premium a client pays for insurance pales in comparison to the costs of a data breach when paid out of pocket. The expenses associated with a data breach are a big reason why 60% of companies go out of business within six months of a cyber breach.
A study from Kaspersky Lab outlines the potential losses associated with a cyber attack. Depending on the size of the business and the amount and type of data stolen, here are the costs your clients could have to pay, on average:
- Compromised devices with sensitive data: $83,000-2.8 million
- Malicious viruses and malware: $68,000-519,000
- Targeted cyber attacks: $188,000-2 million
Without cyber insurance, your clients would have to pay these costs themselves. Ask your clients if they could afford this type of cataclysmic event if it happened tomorrow. If they can’t, then explain that they need cyber insurance.
Explaining Cyber Risks to Clients
Client education is a central part of selling cyber insurance. This means effectively communicating the risks of a cyber incident to businesses of all sizes.
Perhaps one of the most important parts of this is explaining the likelihood of a cyber attack. Many businesses, particularly small businesses, think it will never happen to them. Unfortunately, being a small business doesn’t protect you from an attack; in fact, it can put you more at risk.
Nearly half of small businesses experienced a cyber attack in the last year, according to a report from Hiscox. Of those businesses, 44% were attacked two to four times. This is consistent with findings from the National Cyber Security Alliance, which found that more than 70% of cyber attacks target small businesses. Explaining this to your clients can go a long way to showing them why cyber insurance is so important.
Explaining the specific types of cyber threats your clients face is another strategy that helps communicate the risks involved. While the list below is non-exhaustive, it does outline common cyber attacks and what they mean for your clients:
This occurs when a hacker takes control of a business’ or individual’s computer system and prevents access while holding the data hostage. The hacker will demand payment to unlock the data and threaten to release sensitive information or delete the data if the ransom is not paid.
- Phishing attacks
Hackers pose as legitimate individuals or entities to gain access to sensitive information including usernames, passwords, and network credentials. They use this information to gain further access to restricted data. According to the Enterprise Phishing Susceptibility and Resiliency Report, 91% of targeted cyber attacks can be traced to a phishing email.
- Eavesdropping attacks
These attacks target data transmitted over a network between computers, smartphones, or other devices. These attacks are very difficult to detect and the target often does not realize their data has been compromised until it’s too late.
- Third party attacks
Even if your clients take proactive steps to secure their data, if they do business with or outsource to third-party vendors, their data could be compromised if the third party is breached. In the event of a third party breach, your client can still be held liable.
Discussing What a Policy Covers
It’s important for your clients to understand what a cyber policy would actually cover. Cyber insurance is more comprehensive than ever before, with wide-ranging policies that fully protect your client in the event of a breach. With a policy, many of your clients’ costs would be covered, including:
- Notification costs to inform customers, regulatory entities, and the media
- IT Forensics / Investigation costs to determine the cause and size of the breach
- Credit protection costs to provide mandatory financial monitoring services
- Breach of contract costs
- Legal defense costs
- Regulatory fines and penalties / PCI Fines and Assessments
- Ransomware / extortion payments or the costs associated with rebuilding your network
- Business interruption costs
If you’re wondering how to sell cyber insurance to your clients, consider having a discussion that outlines the specific cyber risks they face, the costs associated with those exposures, and what cyber insurance will cover. You can make a strong case that the small premiums would be well worth it.
When your client is ready, you can show them their options through our Cyber IQ Comparative Rate Portal. This powerful tool gives you multiple quotes from top carriers and a comprehensive quote comparison document in just minutes. For more information or more tips on how to sell cyber insurance, reach out to one of our cyber experts today!