Cyber insurance is used to help individuals and businesses handle the result of internet-based risks, such as cyberattacks. A cyberattack could result in leaked customer information.
Did you know, according to the Canadian federal government, a single cyberattack can cost a business an average of $15,000? These costs may include lost revenue (i.e. if the business can’t use their computer system because of the hack), computer experts to evaluate the impact of the hack, costs to notify clients and legal fees, among other expenses.
If customer information is compromised by a cyberattack, business owners can be sued. If you’re a business owner and aren’t sure about whether to get cyber insurance, here are some questions to think about.
Do you use a computer or mobile device for your business operations?
If you answered “yes,” cyber insurance is something you should consider. Here’s why:
The result of a cyberattack could be costly
Some ways cyberattacks occur are through viruses downloaded from emails or websites. For example, if you clicked on a link in a spam email, you could get a virus. The “attack” might lock you out of your computer, erase data or, result in ransomware. “Ransomware” is software which prevents you from logging into your computer until you pay a certain amount of money. Cyber insurance could help with costs to repair your data from a cyberattack and, depending on the insurance policy, cover ransomware attacks.
You could be sued if sensitive personal information is exposed
If you store sensitive information (such as customer credit cards numbers) on your computer or in a cloud-based server, you could face a lawsuit if it’s hacked. You could also be sued if a customer is directly impacted by the hack. For example, if a customer’s credit card information was released online, and their card received extra charges, they could file a lawsuit. Cyber insurance could help with legal fees.
Notifying customers about a hack takes financial resources
If a business is hacked, it could be costly to notify customers. For example, if you’re a victim of a cyberattack, it could cost you to restore your customer email list. Cyber insurance could help with covering costs when it comes letting customers know about a cyberattack.
Do you have employees?
If you have employees and they can access customer or business-related information from a computer or an external login, it’s important to educate them about cyberattacks. Here are some points to share:
- Never click on links in an email unless you’re confident it’s legitimate. Hover your mouse over the link to see where it is going to take you, as it may reveal a different email address.
- Share information about concerning emails (this keeps all team members on alert for potential scams).
- Use secure networks if company information needs to be accessed offsite (public WiFi is not a secure network and could be hacked).
- Change passwords on a regular basis. If you have multiple logins, you could also look into software programs which manage and store this type of information.
- Make frequent backup copies of important data and keep at least one backup offsite.
If an employee makes an error and accidentally downloads a virus, you could also be sued if customers are impacted. Cyber insurance could also help with these expenses.
Do you use laptops for business purposes?
If you, or your employees, use laptops to access company information outside of work, it’s important to do the following:
- Keep the laptop in a secure location. If the laptop is left in an open area or, where it’s easily seen (such as on a car seat) it could be stolen. If it’s stolen, computer data could be compromised.
- Encrypt all data. When you encrypt files, it means a password is required to view the information. Without the password, the information is in an unreadable format.
- Remember to access information from a secure network. It could be easier to use WiFi, but your information is at risk.
Answering your questions
I have business liability insurance. Won’t this cover costs from a cyberattack?
Business insurance and cyber insurance are two different insurance coverages. “Business insurance” can refer to a third party liability. This means if a third party, such as a customer, experienced bodily injury or damage to their property from your business, you could be sued. Business insurance does not cover the result of cyberattacks. This is why it’s important to get cyber insurance.
If my business gets hacked, and I can’t use my computer, will cyber insurance cover the cost of lost revenue?
This scenario would fall under business interruption insurance, which can be added in a business insurance policy. However, it’s important to ask your BrokerLink broker about this – some cyber insurance policies could cover business interruption.
What type of business insurance should I get to make sure I cover my main exposures?
This is where our commercial insurance experts come in. They’ll tailor the coverage specific to your business needs. In the meantime, check out our blog on different types of business insurance to get more information.
Give us a call to learn more
Our commercial insurance experts understand the risks businesses face and the insurance coverages which could help. Contact us to learn more and see how your business could benefit from cyber insurance.