Why Do Small Businesses in NJ Need Cyber Liability?
New Jersey is one of the smaller US states, however, it’s densely populated. Many industries contribute to the thriving economy, including technology, clean energy, media and film, and financial services. No matter which type of business you run in New Jersey, you’ll need cyber security support to protect your investment and brand.
According to Tech Injury, '30,000 websites are hacked daily, and 64% of companies have experienced at least one form of cyber attack.' Some of the biggest threats to companies are phishing attacks, malware, ransomware, social engineering, and DDoS attacks. To stay safe, online businesses need adequate protection, including cyber liability insurance.
What Is Cyber Liability?
Cyber liability is a type of insurance to protect companies from cyber security threats. In the event of a cyber security breach, cyber liability insurance acts as damage control. If a business suffers financial losses because of a data breach, these losses will be covered by a cyber liability policy. A typical policy is likely to cover the following costs:
- Restoring Data: Covers the expenses associated with replacing damaged software and restoring programs & data.
- Downtime Losses: When operations come to a halt, your business ends up losing money. A cyber liability policy will cover any financial losses because of downtime.
- Cyber Extortion: These insurance policies can also cover ransom payments, as sometimes hackers will steal info and threaten to destroy it unless a ransom is paid.
In the aftermath of a cyber attack, businesses may need to hire an IT expert, attorney, or a PR professional (depending on the damages caused). Some cyber liability policies also cover these expenses.
How Is Cyber Liability Insurance Different From Data Breach Coverage?
According to Forbes, ‘Data breach insurance will assist your business if sensitive financial data gets exposed in a data breach.’ There’s also the option to add extra coverage, such as business income insurance, for example. This would be appropriate if you temporarily could not operate because of a data breach.
Cyber liability insurance is a more comprehensive form of coverage designed for businesses who want robust cyber protection. Cyber liability covers financial losses and also offers legal protection. Data breach coverage acts to protect your finances, however, it does not include legal protection.
Why Do Small Businesses Need Cyber Liability?
There are many reasons businesses need cyber liability coverage.
Financial Losses
According to Solvere One, small businesses pay an average of $38,000 for a cyber attack, while larger companies can pay up to $570,000. Businesses may struggle to pay for the damages and associated expenses without a cyber liability policy. You’ve worked hard to make your business a success, but unless you protect your investment, you’re putting your company at risk.
Reputational Losses
Research from Data Privacy Manner discovered that, ‘71% of CMOs believe that the biggest cost of a security incident is loss of brand value.’ Experiencing a data breach can damage your reputation, as both potential and existing customers may lose trust in your brand.
When you suffer reputational losses, it’s advisable to work with PR companies and reputational management services. Certain cyber security policies will cover these costs, and help you to get back on your feet.
Reduce Downtime
Data from Varonis discovered that, ‘The average time to identify a breach in 2020 was 228 days,’ and ‘the average time to contain a breach was 80 days.’ When business operations come to a standstill, these companies lose out on both time and productivity.
Putting cyber liability policies in place is the best way to reduce downtime and get back up and running fast.
Legal Compliance
When a business experiences a data breach, they are legally obligated to notify anyone affected. Adhering to these regulations can be expensive, especially in relation to identify theft, legal action, and security fixes. A cyber liability policy can cover data exposure and support businesses to comply with the law.
Recover Lost Data
In the aftermath of a data breach, businesses may need to recover lost or stolen data. Cyber liability policies can help businesses retrieve their data and minimize the impact of the breach.
Forensic Support
After a cyber attack, your company will need to perform an investigation to find out what caused the breach, and the extent of the damages. Certain cyber insurance policies can cover forensic costs, helping businesses access expert advice.
Why Do Cybercriminals Target Small Businesses?
Identity thieves often prey upon small businesses because they typically have less security in place than their larger counterparts. With the help of cyber liability insurance, small businesses can protect their interests and access the support they need.
What Can Businesses Do To Prevent a Cyber Security Attack?
There are many things that businesses can do to prevent a cyber security attack:
Security Best Practices
To prevent a security breach, businesses must adhere to cyber security best practices. Companies should use multi-factor authentication systems to check the identity of anyone accessing their network.
MFA systems include layers, such as robust passwords, SMS message codes, and testing biometric traits. With robust security practices, businesses can keep unauthorized people from accessing their data.
Companies can take advantage of Mobile Device Management systems to oversee their remote network and trigger security updates. Password management tools can also help businesses keep their various accounts secure.
Security Software
Businesses should be using security software to keep their data safe and sound. This includes antivirus and anti-malware software, as well as cloud based security software.
If you’re not sure how to improve your online security, consider hiring an IT firm to perform a security audit.
Train Your Team
Ensure that you provide your team with effective cyber security training. Teach them how to spot phishing scams and how to protect their accounts. Cyber attacks are becoming more advanced all the time, and so it’s vital that your team have the knowledge that they need.
With the right cyber security protection, you’ll help keep your company safe from a cyber attack. If you experience a cyber attack, a cyber liability policy will help you cover the costs and provide you with access to expert help to maintain your reputation.
To learn more about cyber liability insurance, contact the Calhoun Agency.
