Cyber liability insurance brokers: Why your business needs them?

Business

In Canada almost every other business is dependent on the internet. This dependence on technology increases the exposure of business firms and makes them vulnerable to cyber attacks.

As per experts almost 70% of hackers in Canada target small to mid-sized businesses as they are less likely to have sophisticated software protection systems than large global enterprises.

Typical examples of cyber crime to which small businesses are exposed to include ransomware, malware, identity theft, invasion of privacy, internet fraud, ATM & wire fraud, phishing messages, file sharing & piracy, counterfeiting & forgery, denial of service, hacking into emails and databases of organizations and generating schemes based on fake websites.

Why are cyber liability insurance brokers significant?

In view of the above, cyber liability insurance brokers have achieved significance. They advise their clients on the risks associated with a data breaches and rising incidents of cyber crime.

Some insurers do not offer cover for cyber crimes and in cases where coverage does exist, then it is not current, or policy wordings may be difficult to understand for small business owners. Questions related to bundling of insurance, choosing a higher deductible, or preparing a cyber crime plan are very difficult for ordinary consumers.

In this situation cyber liability insurance brokers help small business owners navigate the space and obtain specialized lines of coverage best-suited for their specific needs.

Prejudices of small business owners overcome by cyber liability insurance brokers:

There are instances where small business owners are reluctant to buy cyber insurance even though they realize that they have exposure to cyber attacks. These reasons are as follows:

Large businesses are more vulnerable

Small business owners feel that large corporations are more vulnerable to cyber attacks, whereas the reality is that small to mid-sized enterprises are more prone to cyber attacks.

Financial implications not understood

Small business owners just don’t understand how damaging a data breach can be and the financial implications of recovering from the loss and rebuilding the business again.

Unaware of cyber insurance offerings

Cyber liability insurance brokers dispel the myth that cyber insurance policies are expensive and don’t provide adequate coverage. The reality is that cyber insurance policies are actually comprehensive and cover the costs associated with a data breach.

Losses related to cyber attacks are not covered by general liability insurance

This is a very important point, but sadly most business owners are not aware about it. They feel that they are covered and protected from cyber attacks, whereas that is not the case, because risks due to exposure to cyber attacks are different than risks covered by general liability insurance.

Therefore, cyber liability insurance brokers take up the onus to inform business owners that cyber threats require cyber insurance. The nature and scope of potential damage that can happen as a result of a cyber attack is completely beyond the coverage that is typically offered under general liability insurance.

Hence, they convince business owners that no matter what the size of their business is, or which industry they are operating in; as long as they have a website and they are collecting customer data, then they should be covered under cyber risk insurance.

Cyber liability insurance brokers bring a sense of relief to business owners

Once they are covered under cyber risk insurance, business owners can operate with a peace of mind.

In the unfortunate event that a data breach does take place whether internally, or through a third-party service provider, business owners are able to meet the expenses associated with the investigation and forensic services.

Even in those cases where the breach is small, the expenses related to investigation and forensics can be huge and beyond the means of small businesses.

Conclusion

Cyber liability insurance brokers help business owners identify their exposure to cyber threats and guide them to buy the right cyber liability insurance policy that adequately covers their risks, is not expensive and is overall best-suited for their needs.

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