In the digital age, businesses of all sizes rely on computer networks. This connectivity lets enterprises increase reach and response, among other benefits. But it also increases the risks of doing business, as cyber criminals disrupt operations and compromise sensitive information.
Small businesses are not exempt from the threat. In some ways, they are more vulnerable than larger ones. Cyber insurance for small businesses is crucial to these companies’ cyber risk mitigation efforts.
At ProWriters, our experts can help you find, quote, and sell the right Cyber Insurance for your small business clients.
What Small Business Owners Must Know About Cyber Attacks
One small business owner after another has told us they don’t think they need Cyber Insurance. They assume they’ll never have to deal with cyber attacks.
Unfortunately, data doesn’t support their assumption. Small businesses are actually more likely, not less, to be targeted by cyber criminals.
Large-scale data breaches affecting millions of customers and leading to multimillion-dollar settlements make dramatic news headlines. But for every large corporation breached, thousands of smaller businesses are under attack.
Hackers often focus on smaller businesses because they view these organizations’ computer systems as weaker and easier to exploit. As of late 2019, 43% of cyber attacks targeted small businesses.
If a company handles such personal information as healthcare data or credit card numbers, they run an obvious risk of falling victim to a data breach. But even businesses that don’t handle this kind of information are at risk.
Cyber crime is ultimately all about money. Hackers can make money no matter what data they access and steal from their targets.
For example, hackers can use ransomware to hold a business’ data hostage, demanding payment in exchange for decryption.
If the business doesn’t pay, the hacker may destroy the data, hoping to profit from their targets’ dependence on it. Or they might publish the data online, an event that could deal a punishing blow to a company’s reputation and future profitability.
In either case, ransomware attackers don’t especially care about the data itself—only the potentially devastating impact of its destruction or publication on the business.
Most Small Businesses Are Unprepared for Cyber Incident Costs
Cyber security insurance for small businesses is critical because many are unprepared to handle a data breach.
A major gap exists between what companies are prepared for and what they will likely face. Only 28% of small business owners responding to a CNBC/Momentive survey in 2021 reported having a cyber incident response plan. Only 26% carried Cyber Insurance for small businesses.
This lack of preparation is particularly striking among companies handling electronic payments. These businesses must comply with the Payment Card Industry Data Security Standard (PCI DSS) or risk fines and penalties. But PCI compliance doesn’t necessarily ensure a company is prepared for a cyber attack.
A 2022 report found less than half (43.4%) of businesses were PCI compliant. And even businesses that are PCI compliant have experienced major data breaches. Target is one prominent example. The company was certified PCI compliant weeks before hackers stole data from it, affecting 41 million customers.
Target is a large corporation. But small businesses can and should learn from the incident. PCI compliance isn’t the same as protection, and many meeting PCI standards can leave companies unprepared for a data breach.
A cyber attack can cost a small business anywhere from $120,000 to $1.24 million. This range is large. But when a company is caught unprepared—especially without Cyber Security Insurance for small business—the final amount, whatever it is, can prove too high to absorb.
The Big Difference Data Breach Insurance for Small Business Makes
Cyber Insurance helps small businesses proactively mitigate cyber security risks.
More comprehensive policies than ever before are available. Helping your small business clients acquire the right policy for their circumstances can give them great peace of mind.
A robust policy can include first- and third-party coverages for costs associated with data breaches and other cyber incidents. These costs include:
- Ransomware payments
- Forensic IT investigations
- Equipment replacement and network rebuilding
- Business interruption
- Notification of and credit monitoring for affected individuals
- Breach of contract and negligence claims
- Regulatory fines and penalties
With more than 20 years of experience, access to comprehensive policies that cover a wide range of exposures, and dedicated customer service, ProWriters has what you need to quote and sell your clients the Cyber Insurance for small businesses that they need.
One of the most powerful tools our registered brokers can use is our proprietary Cyber IQ Comparative Rate Platform. This innovative technology allows you to generate multiple Cyber quotes from top carriers for side-by-side comparison in mere minutes.