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Cyber Security

Should You Buy Cyber Liability Coverage?

Cyber SecurityAccording to a report earlier this year, over three-quarters of data breaches occur at companies with fewer than 100 employees.

The average cost of a compromised customer record is $141  to cover notification, settlements, legal fees, and more. To ballpark your exposure, figure that if your data is breached and you have 200 customers, it could cost you about $28,200. (Note: The above referenced report is free, but you must sign up to download it.)

And data breaches aren't the only concern.

Ransomeware is on the rise. Newsweek reported that attacks in 2017 were up 250%. The average demand: over $1,000.

One solution for the significant financial exposure of being hacked: cyber liability coverage.

For example, Traveler's Small Business Data Breach Insurance covers the cost of notification to customers, credit card monitoring, public relations expenses, consulting/forensic fees to identify/resolve the cause of the breach, and legal costs. A number of other insurance companies offer cyber liability coverage to small businesses.

Talk with your insurance agent to see whether a separate policy or an add-on to your business owner's policy (BOP) is needed and what it will cost. Determine whether the policy you're considering does, or does not, include payment for a ransom demand.