Is Cyber Insurance BS? | A Small Business Guide

Is Cyber Insurance BS? The Real Answer

No, I don’t think so. Of course, that’s the answer you’d expect me to say, but let me explain why.

Most businesses purchase various forms of business insurance—property, liability, auto, workers comp, umbrella, and so forth. These five policies or coverages are mandatory.

If you own property and have a mortgage or loan, you must have property insurance. You can’t even lease a computer or copy machine without property insurance. Lease a premises, and your landlord will likely mandate liability and possibly an umbrella.

Have employees? Workers’ comp is mandated. Of course, if you have a car or truck, you need auto liability insurance as required by your state.

You don’t have to purchase cyber insurance unless a contract with a big company requires it. Even then, sometimes you can skate by.

The point I’m getting to is that cyber insurance is truly optional coverage. Many business owners think, “If no one requires it, I don’t really need it.”

Let me also say that I understand no one likes to spend money on business insurance. The five policies you have are often seen as the cost of doing business. So, I get that keeping your insurance budget to a minimum is critically important to you.

But… is cyber insurance just another bill to pay that you really don’t need?

This is where the rubber meets the road. The answer is—you won’t know until something bad happens. That “bad thing” could be a breach, a hack, a ransomware attack, or wire transfer fraud.

Do these threats actually happen to small businesses?

If you put ten business owners in a room and mentioned social engineering, wire transfer fraud, or other hacks, at least one person in that room would have experienced it. At least three or four people could tell you stories of other small businesses that have had it happen to them.

I could provide tons of data from dozens of sources that illustrate the rising threat of cyber attacks against small businesses in America every day, but I don’t think that’s helpful in changing anyone’s mind.

Instead, think about what you would do if one day an employee clicked a link or opened an email that locked your network down with a ransomware attack, and the hacker demanded a six-figure extortion payment to give you back access to your data.

Or, what if you found out that your company wired a $50,000 payment to a supplier or vendor, but it went to a hacker instead, and the money is gone?

Or, you discover that malware has been on your computer for months, and sensitive data like customer lists have been compromised, stolen, or damaged.

These are the types of threats businesses of all sizes face an estimated 2,200 times a DAY across America.

Any of these events could cost a small business anywhere from a few thousand dollars to potentially millions.

Back to the question, “what would you do?”

Panic? Probably.

Who would you call? Your attorney? Your accountant? Your MSP? Maybe. If they could fix the problem, how would you pay them?

The point is that cyber insurance isn’t BS. It steps in when an event happens and does two things.

First, it provides a bucket of resources and experts to help mitigate the loss and start fixing the problem.

Second, it provides a bucket of money to pay for those experts, your costs, and your direct and indirect losses. No other business insurance policy will do that.

What does Cyber Insurance cost?

The premiums for cyber insurance vary based on several factors, but for many small businesses, we’re usually talking about $1,500 to $3,000 or less than 10% of an existing business insurance budget line.

Would you rather have that money on your bottom line than in the insurance company’s pocket?

That’s a question you’ll have to answer. You may never experience a cyber event, but you might, and that’s what insurance does—it steps in to pay for unexpected events in our business lives.

Here’s the bottom line—cyber events are costly and occur very regularly at small businesses without warning.

It only takes one key stroke, one software vulnerability, or one human action to trigger a five, six, or seven-figure financial impact. Do you want to pay that loss out of pocket, or would you rather have an insurer cover it?

If you’ve considered cyber insurance in the past but didn’t know who or how to get it, we can help. We are experts in cyber insurance and have access to every cyber insurer to ensure no stone is left unturned in getting you the best policy in the market.

Give me a call, or click the “Let’s Chat” button — I’d love to hear from you. I promise no arm-twisting or pushy sales nonsense. Just solid advice and action steps to get you covered from this dangerous threat.

Thanks!