Many small business owners are familiar with the need to purchase a business insurance policy. This is a policy that will cover property damage and equipment that is missing or stolen. However, this type of insurance typically does not over the loss of data on a computer and a website that is offline because of malware or a power failure. A business can even be sued for a claim posted on social media. A business can cover many computer-related issues by purchasing cyber insurance.
Many businesses who advertise having cyber insurance can offer business partners and customers a lot of confidence. A business entity may also find certain clients will require a partnering business to have a cyber insurance policy in force. One benefit of this insurance is it can often soothe any concerns that a technological deficient decision maker may have about a business. Many businesses will find adding cyber insurance to a general liability policy will be a minimal cost.
Assess Financial Risk
A business owner considering purchasing cyber insurance needs to determine the value of their data to their business. There is also the cost of addressing any problems that can go wrong if data is lost or the laptop of an employee stops working. Covering for certain types of losses without insurance will often be expensive. Any business owner who finds absorbing losses to much of a risk will need to add cyber insurance coverage. If a company has data that is sought after by identity thieves will want ensure that liability risk is minimized.
Companies that do not aggregate customer data or have a slim chance of seeing a security breach often do not need cyber insurance. A business will need to determine if the fallout will be manageable or not even be much of an issue. This will depend on the type of information stored on company servers. The best thing for a business to do is use an online tool to assess the value of their data and the liability that could exist.
Evaluate Security Risk
Businesses need to take certain steps to show they are responsible about protecting their data and many other aspects of their business. A large business often has many hoops to jump through to prove that all the necessary steps are being taken. One aspect about a small business is an insurance carrier may offer a simple questionnaire to complete. This will include questions about existing security and the types of business operations. A few business entities may be required to make improvements to ensure that they meet the necessary security standards.
Review Insurance Options
Comparing the coverage options offered by various insurance companies can often be daunting. This is a task that is best suited for an independent insurance agent. Another thing to consider is inquiring with the current insurance carrier or agent who is servicing an existing insurance policy. Many times adding cyber insurance to an existing business insurance policy will be cheaper than the purchase of a separate policy.
The best option is to look at adding a rider or endorsement to an existing policy. However, a business will need the necessary amount of coverage.
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