Cyber Insurance and Small Business
- The second biggest risk to global business is cyber incidents.
- The estimated value of cyber insurance premiums worldwide in 2025 is $20 Billion
- The average cost to a U.S. business affected by a data breach in 2019 is $8 Million
- The percentage of customers wary of working with a business that suffered a credit/debit care data breach is 86%
In today’s digital age, it is with almost 100% certainty that your business is storing, sending or receiving some form of electronic data. Whether it be sales projections, tax records, customer data or other sensitive information, that data is available for use electronically and if not handled correctly, susceptible to any number of data breaching techniques. While the cost of storing and protecting that data can be large, the cost of that data being compromised can be even more significant. Despite the statistics, many companies are not utilizing any form of cyber liability coverage. This is especially the case for small businesses. In this blog, we’ll discuss the ins and outs of cyber liability coverage and why many small businesses may be hesitant to discuss their options.
What is Cyber Liability Insurance?
Cyber liability insurance is a policy that covers losses that result from data breaches, hacks and other cyber-related events. These types of policies generally include coverages for both first-party and third-party incidents. First-party coverages typically insure losses sustained by your company while third-party coverages insure for claims against your business. Some of the more common claims filed under cyber liability insurance for losses or damages include:
- Electronic Data
- Income or Expenses
- Cyber Extortion
- Notification Costs
- Network Security Liability
- Network Privacy Liability
- Electronic Media Liability
Why are Small Businesses Hesitant to Purchase Cyber Liability Insurance?
According to the Insurance Information Institute (I.I.I.), 44% of small businesses don’t have cyber coverage and for those who didn’t know if they had a policy in place, 64% said they had no plans to purchase. So why the hesitation? There is a variety of different reasons for this. One, they feel it costs too much. Two, small businesses feel that there are too many exclusions that limit the scope of their coverage. Three, they feel their risk profile doesn’t warrant coverage. Lastly, many feel that they can sufficiently manage their risks internally.
Providing Value to the Insured
In order to bring value to these small businesses still on the fence about cyber liability coverage, insurance companies must provide trust through risk mitigation. At Colony West, we work with our customers, large and small, to mitigate risks across their business. We believe that making our customers more resilient from the start of coverage while providing the most up-to-date loss prevention measures, will help reduce their claims and damages in the likely event a breach does happen.
Don’t let a cyber-breach completely catch your business off-guard. Speak with a Colony West representative today to see how we can help you become resilient while offering the latest in cyber liability insurance policies that best suit your business.