Why do small businesses need cyber insurance?

Did you know that your small business is nine times more likely to fall victim to cyber crime than to a ‘real-life’ burglary?

That was the finding of YouGov research earlier this year, and it should be a wake-up call for small businesses. The idea of cyber crime may be relatively new, but that doesn’t mean it’s not now a very real threat that every business, however, big or small, needs to be taking seriously.

What is cyber crime?

‘Cyber crime’ is a blanket term given to numerous kinds of crime taking place via your computer systems or website. It could be a data breach, for example, or your website could be maliciously hacked. Viruses and other types of malware also come under the umbrella of cyber crime, as does phishing and other kinds of what’s known as ‘social engineering’, which describes the way cyber criminals use various forms of online interaction to trick you into revealing sensitive information (such as passwords).

Does your business need cyber insurance?

In short, if your business has a website, computer(s), an electronic customer database and/or payment systems, you need cyber insurance. That’s because there are financial implications to your business when it comes to getting systems back up and running, putting protection in place to prevent it happening again, and so on.

Depending on the unique needs of your business, you can get insurance cover for a range of cyber crime-related costs. For instance, if you hold a customer database containing sensitive personal information, you might want to take out cover for GDPR investigations, which you could be subject to if you suffer a data breach.

A cyber insurance policy can also include business interruption insurance, designed to cover the costs of keeping your business afloat when you’re not able to continue operating as normal.

Take out cyber insurance today

With 1 in 3 small businesses having experienced cyber crime, cyber insurance provides peace of mind that your business can keep going should you fall victim to this relatively new form of crime.

Your policy should take into account the ways in which your business may be vulnerable to cyber threats, and you may find that some providers ask for a ‘cyber profile’ outlining the risks and potential expenses that could be incurred should you experience cyber crime. It’s also important to make sure that you don’t see cyber insurance as an alternative to putting in place adequate cyber security, such as anti-virus software – it’s there to cover you if the worst happens, but as with any kind of insurance, the hope is always that you won’t need to make a claim.

Contact one of our business insurance experts today for more information.