March 13, 2023
Insurance is a part of doing business. However, cyber liability insurance is becoming increasingly important for businesses of all sizes in today's digital age and is law if you operate using data. And pretty much no startup can work without computers. So, here's why you need it.
Cyber liability insurance can help cover the costs of a data breach, such as notifying those who were affected, finding out what caused the breach, and giving those who were affected credit monitoring services. This is important for every business. And not just jobs in offices. Even more hands-on services, like precast concrete services for a construction company, depend on data and communication. And these can be used on many different devices across the company.
Cyber attacks happen all the time in modern businesses. And they can be very expensive. For example, in 2021, hackers caused CNA Financial to pay $40 million. Cyber liability insurance can help cover the costs of cyber attacks like ransomware attacks, denial-of-service attacks (DDoS), and other types of malware attacks. If your business has cyber liability insurance, it can be better protected from the financial effects of cyber attacks, including paying a huge ransom.
You are responsible for ALL data you hold. Even more so if it's sensitive and has to do with people. This means that you can be sued if you lose it. So, cyber liability insurance can help cover legal costs if your online business is sued because of a cyber incident. This means paying for lawyers and court costs. And if your business decides to settle a lawsuit that started because of a cyber incident, cyber liability insurance can help pay for a very, very expensive settlement.
Depending on the type of business you run, you may need cyber liability insurance in order to follow certain laws and rules. For example, some US states have laws that require businesses to tell people whose information has been stolen when there is a data breach. In the same way, some industries, such as eCommerce, have rules and regulations about cyber security. In order to work in these industries, you have to have cyber liability insurance to operate within them.
When your business loses data, especially bad data, it costs you more than just money. A cyber-attack can hurt the reputation of your business. Cyber liability insurance, on the other hand, can help cover the costs of hiring public relations firms or marketing firms to help fix the damage. It can also help you tell your customers and other important people that your business is taking steps to fix the problem. This is a service you will desperately need after an incident.
There are numerous policies you must attain. These are well-known, common and easy to get. But if you work with customer data, for example, your startup needs cyber liability insurance to help with breach protection, legal expenses and reputation management following an incident.
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