Cyber Insurance Is Becoming Necessary for Small Businesses

$75 Billion.

That’s the total amount of money that ransomware costs businesses per year. Ransomware is one of the most common types of cyberattacks used by cybercriminals to steal or block access to data.

Cyber attacks are often not a matter of “if,” but “when.” While the occurrence of cyber attacks continues to increase rapidly, most businesses fail to prepare for them. Even businesses implementing the best cybersecurity systems and safety measures are prone to becoming victims of cyber-attacks.

Some of the largest companies in the world with seemingly unlimited resources are still victims of cyber-attacks. Notable victims of significant cyber attacks include LinkedIn, Yahoo, Marriott, Equifax, eBay, Adobe, and more. Thus, if the world’s largest companies are prone to cyber-attacks, small businesses are certainly prone, as well.

While many small businesses carry general liability insurance, they fail to carry cyber insurance. Cyber insurance is starting to become an absolute necessity for small businesses today. General liability insurance normally fails to cover cyber attacks, data breaches, and other similar cyber-related incidents. Thus, a small business that is caught off-guard by a cyber attack will have major difficulties without cyber insurance.

All fifty states in the country have their own laws requiring businesses to comply with certain cybersecurity and data breach regulations. For instance, states often require businesses to notify each and every customer affected by a data breach. Businesses also need to provide customers with detailed information on which information was potentially exposed to cybercriminals. Additionally, businesses may need to notify state regulators in the event of a cyber-attack, which could make matters much worse.

Overall, businesses are faced with an entire process of compliance following the event of a cyberattack. This process is quite costly – both in terms of time and money. Without cyber insurance, this process could easily distract you from running your small business. However, with the right cyber insurance policy tailored to your small business, this process could keep you focused and prepared without needing to worry about the various costs of a cyber attack.

If you have any questions at all about navigating through the process of dealing with a cyber attack, finding the right cyber insurance policy, or general questions about cybersecurity, please feel free to give us a call. We are more than happy to serve you.

Vernon Litigation Group represents businesses and individuals throughout the United States who have financial disputes, including cyber litigation, securities litigation & arbitration, business & commercial litigation, financial advisors & employment disputes, and FINRA arbitration.

For more information, contact us at info@vernonlitigation.com or call (239) 319-4434.

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