Coverage Definitions
Our team (entirely based in the U.S.A.) of licensed, experienced and dedicated experts, will help you navigate the world of Cyber Insurance from a clear and simplified approach. Having over 24 years of experience working with commercial, municipal, and personal insurance exposures, allows the ability to use our experience to make the complicated easy to understand. “Anyone can make something difficult to understand more complicated. We thrive at making the ‘complicated’ simplified, clear and easy to understand.”
"Organizations are more connected than ever and rely on technology across all aspects of their business. This comes with new exposures, and every business must take the right steps to proactively manage risk. According to the Global Cyber Alliance, more than 43% of cyber attacks target small businesses, which often lack the security and technical expertise of larger organizations."
First Party Damages:
Cyber liability insurance provides businesses with financial security against the costs associated with an unfortunate data breach. This helpful coverage can cover a range of operations including:
- Loss of electronic data: Cyber threats are ever-present and continual vigilance is necessary. Ensure your business has the right protection to recover quickly should critical data be lost or destroyed due to an attack – this insurance covers those repair costs and provides replacement of any stolen information, keeping you operational no matter what the cyber criminals throw at you.
- Cyber extortion/ransom: Protect your data from potential cyber extortion with specialized insurance coverage. Don’t let criminals hold your business hostage—ensure you’re able to pay ransom costs and get back the information they’ve stolen quickly and easily.
- Business interruption/loss of income: No business owner wants to have their operations disrupted by a cyber-attack—but with the right insurance policy, you can get peace of mind knowing that lost income and other related expenses will be covered. Protect your livelihood today: invest in effective cyber liability protection!
- Security fixes and cyber forensics: Security breaches can be a costly consequence of inadequate cyber protection. With liability coverage, you’ll have the resources needed to protect your data and investigate any issues with swiftness and accuracy; ensuring confidence in your business’s digital defenses.
- Notification and identity protection for affected customers: To help provide peace of mind to everyone, cyber liability coverage can assist in getting ahead of potential data breaches by providing assistance with notification and identity protection for those affected.
- Fraud and credit monitoring services: Cyber liability insurance can help protect you from the costly consequences of a data breach. One key benefit is that it covers credit monitoring for any customers affected, giving peace of mind to both parties in knowing their sensitive information remains secure.
- The impact on your business reputation: Cyber liability insurance helps safeguard your business, should you be facing costly repercussions for libel or copyright infringement. Not only will it cover the financial costs associated with legal actions and technological repairs needed to combat a breach, but also of managing public relations in order to repair any damage done to your reputation as an entity.
Third-Party Coverage Offered:
- Damages to a third-party system: In the event of a computer virus inadvertently being sent to an outside system, there may be severe repercussions for those responsible with possible damages needing to be addressed.
- Network security and privacy liability: Network security and privacy liability safeguards your small business from potential legal repercussions due to an alleged lack of data protection or insufficient attention paid towards privacy standards. Investing in this type of coverage can help protect you, as well as the valuable data belonging to your customers.
- Media liability claims: Including accusations of fraud, libel, slander, etc.
- Regulatory proceedings and/or fines form regulatory bodies.
- Legal costs, settlements, and damage awards up to the limits of the polices.
Small Business Cyber Insurance Statistics
AdvisorSmith conducted a survey of 1,122 U.S. small business owners and managers to understand their familiarity with cyber insurance and how they are preparing against cyber threats.
64% of small businesses aren’t sure what cyber insurance is.
AdvisorSmith’s survey showed that overall, 64.2% of small business owners were not familiar with cyber insurance, with 25.3% saying they “do not know what cyber insurance is,” and 38.9% saying they were “not sure what cyber insurance covers.” As cyber crime rapidly evolves, small businesses are increasingly becoming targets. To protect themselves against the financial consequences of a potential data breach or attack, an increasing number of entrepreneurs may consider incorporating cyber insurance into their overall risk mitigation strategy.
Here is a breakdown of how familiar small businesses are with cyber insurance:
- 39%: Not sure what cyber insurance covers.
- 25%: Do not know what cyber insurance is.
- 19%: Know what cyber insurance is, but have no plans to purchase.
- 17%: Have some form of cyber insurance coverage.
72% of small businesses that purchased cyber insurance did so after hearing about or being the victim of a cyberattack.
AdvisorSmith’s survey revealed an interesting trend: many small businesses who carry cyber insurance decided to purchase coverage as a result of experiences with, or knowledge of, prior attacks. Interestingly enough, while commercial general liability and workers’ compensation are considered essential coverages for any business – often due to legal requirements – cyber insurance is still widely seen as optional by some organizations despite potentially significant impacts from data breaches.
- 48%: Purchased cyber insurance after being the victim of a cyberattack or cyber loss.
- 20%: Purchased cyber insurance because of the high risks in their industry.
- 19%: Purchased cyber insurance after someone they knew was the victim of a cyberattack or cyber loss.
- 8%: Purchased cyber insurance upon recommendation from a broker or agent.
- 5%: Purchased cyber insurance after hearing about cyber threats in the media.
69% of small businesses are concerned about being the victim of a cyberattack.
Our survey showed that overall, 69.2% of small business owners were concerned about being the victim of a cyberattack in the next 12 months, with 24.9% saying they were “very concerned,” and 44.3% saying they were “somewhat concerned,” and 30.8% saying they were “not concerned at all.”
Younger business owners are 1.8x more likely to be concerned about cyber threats.
| Age | Very concerned | Somewhat concerned | Not concerned at all |
|---|---|---|---|
|
18-29 |
31.15% |
45.90% |
22.95% |
|
30-44 |
24.28% |
41.87% |
33.85% |
|
45-60 |
23.30% |
43.20% |
33.50% |
|
61+ |
17.09% |
48.73% |
34.18% |
72% of small businesses have implemented cybersecurity precautions.
A majority of small business owners and managers have prepared in some way for the threat of a cyberattack. While this seems like a promising step, there are still 28% of respondents that have not implemented any form of cybersecurity protocols. Even a few basic cybersecurity measures can make a big difference in helping your business ward off cyberattacks and data breaches.
The following is a breakdown of the types of cybersecurity preparations small businesses have taken:
- 21%: We have implemented a strong password policy.
- 20%: We have implemented multi-factor authentication.
- 17%: We have implemented data encryption.
- 16%: We have purchased cybersecurity software.
- 16%: We regularly train our employees on cybersecurity.
- 9%: We have hired a cybersecurity consultant.
“The cyber threat landscape will get worse before, AND IF, it gets better.”
