Cyber breaches can impact large multi-national corporations, governments, or charities that affect tens of millions of clients, citizens, or donors. For instance, in 2021, almost one million customers’ information was exposed in a data breach. But despite these types of high-profile cases, many businesses are still unclear as to whether their business insurance policy covers cyber risks, or they feel that cyber insurance is not something they need.
Cyber insurance is an important coverage to have as part of your business insurance policy. We’d like to help clear up some of the misconceptions that are out there about cyber insurance by looking at some frequent questions from business owners.
“Aren’t I protected from cyber risks with general liability insurance?”
This is a common misconception among business owners. Many assume their current insurance policy covers cyber risks through property or liability coverages, but that often isn’t the case. Data isn’t considered a tangible piece of property, so it’s typically excluded under a property policy.
Damages from loss or corruption of electronic data, loss of income resulting from a computer virus, malware, or DDoS attack, and certain expenses like extortion expenses are not covered under traditional liability or property policies. Only cyber insurance can help protect you from those unique risks.
“Do I really need cyber insurance?”
In 2021, just under one-fifth (18 per cent) of Canadian businesses were impacted by cyber security breaches. . As a result of these cyber attacks, 40 per cent of businesses experienced downtime. The average downtime was over 36 hours.
No matter the size of the business, once customers find out about a data breach, this can impact customer trust and may lead to lost business.
If data breaches are on the rise, and nearly one-fifth of Canadian businesses were effected by a cyber breach in 2021, it seems vital that small and medium businesses consider cyber insurance.
“Can’t I run my business without cyber insurance?”
Ask yourself: Do you have an incident response plan, disaster recovery plan, and a business continuity plan? Unfortunately, many businesses don’t. Dealing with a cyber attack can be expensive and cyber insurance is designed to help cover the costs associated with the breach.
Beyond the direct costs of dealing with and recovering from a cyber attack or data breach, there are also other costs that are harder to calculate. Of the Canadian businesses that experienced cyber breaches in 2021, 21 per cent reported additional time needed by employees to finish day-to-day work, 18 per cent reported that employees were unable to finish their work, and 14 per cent reported lost revenue.
The untold impact of a data breach is the reputational damage it can cause.. Customers can be equally worried about the security and privacy of their data when dealing with businesses. If a privacy incident is not properly handled, it can be devastating to the continued success of your business.
Cyber insurance made easy
To learn more about cyber insurance, and how it can help your business, visit our cyber insurance page today. We can help you find the right insurance policy so your business is protected, and you can continue to work worry-free.
This blog is provided for information only and is not a substitute for professional advice. We make no representations or warranties regarding the accuracy or completeness of the information and will not be responsible for any loss arising out of reliance on the information.
