The Growing Threat of Data Theft: A Case for Cyber Insurance
Data theft is on the rise. According to the most recent data, the average cost of a data breach was $9.48 million in 2023. But even smaller businesses can fall victim to cyber attack and scams. That’s why it’s vital to invest in cyber insurance to protect your business — and your clients — from these types of attacks.
Common Types of Cyberattack
Businesses face several types of cyberattacks. Each type of attack uses a different strategy and requires a different approach to protection.
Malware and Ransomware
Malware broadly refers to software you or your employees download to your business devices. This can include viruses that disrupt your system, spyware that harvests sensitive data, or even ransomware. Ransomware will lock up your system, demanding that you pay to regain access to your computer.
Phishing Scams
In a phishing scam, cybercriminals impersonate a customer, bank representative, or other authority figure in order to trick employees into revealing sensitive business data. Email scams are the most common, though social media is also home to phishing scams.
Man-in-the-Middle Attacks
A man-in-the-middle attack occurs when a cybercriminal inserts themselves between your business and a third party, such as a customer or vendor. The criminal, therefore, gains access to business data or financial information without your knowledge or consent.
Denial of Service (DoS) Attacks
Denial of service (DoS) attacks occur when criminals deliberately flood your system with traffic in order to exhaust your bandwidth. This prevents you from fulfilling legitimate requests and may be paired with a ransom threat, forcing you to pay to regain control over your system.
What Does Cyber Insurance Cover?
Cyber insurance can protect your business from the dangers and costs associated with data breaches. Today’s policies are designed to work for both you and any third party involved in a data breach, such as your customers or suppliers.
Protection for Your Business
Cyber insurance primarily benefits your business by:
- Providing legal counsel on notification and regulatory obligations
- Investigating the source and scope of a breach
- Assisting in data recovery
- Notifying your customers of a data breach
- Providing lost income due to business interruption
- Dealing with ransom demands
- Covering fines and any penalties
Having up-to-date coverage will ensure your business stays one step ahead of today’s cybersecurity threats.
Protection for Your Customers
The best cyber insurance policies will also provide protection for your valued customers. This includes:
- Making liability payments to customers affected by the breach
- Paying legal expenses related to lawsuits or regulatory inquiries
- Covering costs associated with defamation or infringement of intellectual property
- Addressing legal actions and compliance issues
Additionally, having a robust cyber insurance policy can give your customers greater confidence in dealing with you and boost your brand reputation.
Covering the Cost of Cyber Insurance
Given the cost of cybercrime, modern businesses can’t afford to forgo cyber insurance. And if cost is an issue, you might consider implementing a dual pricing model through a company like Simpay.
Simpay allows you to charge a lower price for cash-paying customers, which can mitigate the cost of credit card processing. These savings can provide the funds you need for cyber insurance so you can achieve a superior level of protection.
