Many small businesses are adding cybersecurity and data privacy insurance due to the risks associated with employee data collection and increased reliance on computer networks, according to a study of 200 decision-makers conducted by insurance brokerage and consulting firm USI.
Key findings from the USI "2017 Cybersecurity and Data Privacy Study" included:
- 82 percent of small businesses said they purchased cybersecurity and data privacy risk insurance for protection against financial loss.
- 74 percent cited preparing for a data privacy breach as their top reason for buying cybersecurity and data privacy risk insurance.
- Nearly 30 percent of small businesses are unsure about how to start looking for cybersecurity and data privacy risk insurance.
- Most small business have evaluated the financial impact of a disruption from a virus or denial of service attack, but 45 percent do not have network business interruption insurance.
Small businesses often struggle to find cyber insurance coverage that fits their unique needs, USI stated. However, small businesses that understand the dangers associated with cyberattacks and data privacy threats can purchase the right coverage.
Small Business Cyber Insurance Tips
Small businesses face vulnerabilities relative to cyberattacks and data privacy threats, according to USI. Fortunately, small businesses that allocate time and resources to learn about the different types of cyber insurance can purchase coverage that provides financial protection against these dangers.
USI offered the following recommendations to help small businesses discover the optimal cyber insurance coverage:
- Develop an incident response plan. Both an incident response plan and cyber insurance policy enable a small business to effectively respond to a cyberattack. In addition, an incident response plan should be tested and updated regularly.
- Talk to an insurance broker. An insurance broker can provide insights into imposter fraud, network business interruption and other cyber insurance coverage options based on a small business' cybersecurity needs.
- Perform a risk assessment. With a risk assessment, a small business can identify the strengths and weaknesses of its cybersecurity plan and adjust this strategy – and its cyber insurance coverage – as needed.
A cybersecurity and data privacy breach can cause long-lasting damage to a small business, its brand reputation and its revenues, USI stated. If small businesses consider the potential impact of cyberattacks and data breaches, they can determine the right combination of cybersecurity and data privacy services and cyber insurance coverage to minimize risk.
