Does My Small Business Need Cyber Coverage?

Small businesses form the backbone of communities of the United States and its economy. However, while operating a small business can be rewarding and exciting, owners and leaders must account for potential threats.

Cyber incidents and data breaches have emerged as constant risks for all companies in recent years. Fortunately, cyber liability insurance can establish a barrier against the financial consequences of such events.

What Does Cyber Liability Insurance Cover?

Cyber liability insurance, also known as cyber insurance, functions similarly to many other types of coverage. Policies act as contracts between policyholders and their insurance carriers. While coverage remains active, businesses retain the right to submit a claim for financial aid following covered incidents, such as phishing attacks and malware infections.

If approved, a payout may be issued to assist with various losses and expenses caused by the incident, such as the following:

• Incident response costs, such as notifying affected parties and investigating the breach

• Business interruption losses, such as revenue that would’ve been earned if not for the disruption

• Noncompliance fines, such as those issued by regulatory bodies

• Legal expenses, such as attorney fees, settlements and judgments arising from lawsuits

Why Does My Small Business Need Coverage?

While small businesses may have once enjoyed relative safety from cybercriminals, this is no longer the case. Many hackers and cybercrime perpetrators have widened their crosshairs in recent years. In contrast, larger organizations may have once been their prime targets, small and medium-sized companies can be just as tempting.

Furthermore, the increase in utilization of digital solutions in workplaces across all sectors, even those that may have once relied minimally on technology, may make potential losses far more severe.

We’re Here to Help

Contact Compass of California Insurance Services today to learn more about cyber coverage options or compare personalized quotes.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.