According Small Business Trends [1] , the risk of loss is significant:

• 43% of cyber attacks target small business
• 60% of small companies go out of business within 6 months of a cyber attack

As a small business owner, those two facts alone should be reason enough to that cyber coverage is a “need”. It might be important to know that Cyber Liability is one type of insurance for digital risks. The word “liability” describes coverage that protects the insured from losses to others (third-parties) following a breach of private data for expenses such as

• Mounting a legal defense.
• Compensating others for damages related to the breach.
• Costs to banks for re-issuing compromised customer credit cards.
• In some cases regulatory fines and penalties

There are other forms of cyber coverage that will protect the insured (called first-party) for losses they directly incur such as:

• Investigation of the cause of the breach.
• Costs of communicating the breach to customers.
• Offering credit monitoring services to customers.
• Cost of repairing the businesses reputation.
• Loss of profits
• Extra expenses incurred during the time your business is interrupted.

An important thing to know when shopping for cyber insurance is that coverage forms are not standardized. In other words, there is wide variation on the breadth of coverage options available. Some policies are much more liberal, whole others are much more limited in their contract wording. The help of a knowledgeable Independent Insurance Agent would be wise to take advantage of in this arena. Here at the Ryan Agency we can help you better understand the importance of Cyber Liability Insurance and what your options you have when purchasing it. Footnotes [1] CYBER SECURITY STATISTICS - Numbers Small Businesses Need to Know - Small Business Trends