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Why would a hacker target a small business when they could score big with a large company?  That’s what makes us small business owners feel safe.  Well, sorry to say that in the arenas of data breach, hacking, and the theft of personal identification data, small businesses make up 20% of all the hacks!  And the worst part is, without Cyber Liability Insurance, most of us will never recover.  So why don’t we buy a Cyber Liability policy?  Here are some of our excuses:

“I don’t have any vulnerability to being hacked.”  We are all very busy with getting new sales and giving great service, so we rarely consider the security of our website.  After all, it was just went live only 3 years ago.  Security hasn’t changed that much!

“All my sensitive information is in the cloud.  It’s not my responsibility, the vendor is responsible.”  Have you read that 30 page cloud contract?  You may be surprised to find that it puts the protection burden on you and sometimes even makes the data owner defend the vendor in case of breach.  Also, sometimes the vendor sub-contracts out the storage, so you may not even know the reputation of the business storing your data.

“I don’t store or have any data worth stealing.”  Let’s see, do you allow credit card purchases in your store or on your website?  Do you have employees?  Do you offer employee benefits?  Just these couple things expose credit card numbers, social security numbers, names and addresses, and health information, all things hackers love.

“I already have General Liability Insurance.”  If you are like most of the world, you probably haven’t read your liability policy.  In there you will find an exclusion for cyber related losses.  And your property policy doesn’t normally cover intangible property.

Most Hackers are just bored, tech savvy people.  The ones with an agenda, such as terrorism, profit motive or revenge are the ones to look out for.  The recent SONY breach will cost $100,000,000 to repair, the Target breach will cost $162,000,000 and the SONY PlayStation hack will cost $171,000,000.  They all covered by their Cyber Liability policy.  Most security breaches, about 70%, occur due to an honest mistake such as opening a malicious email.  The average data breach cost is $733,000!  This covers the lawyers, cost to notify everyone involved, public relations costs, forensics, credit monitoring for the victims, call centers and any equipment damage or replacement needed.  Could you afford this?

We as small business owners have 2 exposures to Cyber-attacks to cover:

  1. Liability to 3rd parties whose data is stolen.
  2. Our Company’s costs to rectify the breach, plus our loss of income due to down time.

This coincides with the 3 main reasons that businesses buy Cyber Liability insurance:

  1. To counter act any harm to our reputation.
  2. To make up for lost income due to this business interruption.
  3. Data breach response and notification.

So what are you going to do?  Before you say you’ll take your chances, consider this:

Soon our customers will become more educated about their exposures to cyber-attacks and will ask you if you have insurance.  This may become a deciding factor on their doing business with you!


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