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The importance for businesses to have cyber liability coverage

Mosaic Insurance in Prescott provides important information on cyber liability insurance tips for commercial business owners in PrescottIn the Internet-dominated business arena, companies store more sensitive information than ever on their computers. But a shockingly low number of small businesses have invested in cyber liability insurance to combat the potentially devastating effects of a cyber-attack.  Mosaic Insurance provides a detailed reasoning why cyber liability insurance in important for businesses in Prescott.

In fact, many small business owners are unaware of the high risk data breaches at their establishment, in the belief that hackers are likely to attack only high-profile, high-revenue firms.

Regardless of a company’s size or industry, business owners must take action to secure their customers’ valuable data against the possibility of a cyber-attack. In addition, investing in cyber liability insurance protects your assets should such an event occur.

 

The high costs of data breach recovery:

When criminals get access to company databases, they become privy to a vast array of information, including customers’ Social Security numbers, credit card numbers, addresses and other identifying data.

They also gain access to sensitive business data, which they can use to open and access accounts, drain money and destroy the affected individuals’ credit. Recovering from a business data breach can cost companies thousands of dollars in fines and lost reputation.

Such expenses often include:

  • Business interruptions. Not only must hacked businesses often close their doors while they investigate the source and impact of data breaches, they also suffer from decreased sales due to negative publicity and diminished customer confidence. The days or weeks a firm spends out of commission represent lost profits and opportunities.
  • Security overhauls. Updating or implementing a new security system costs a great deal in software, infrastructure and personnel. It also requires training staff in new policies and procedures.
  • Concessions to customers. As a sign of goodwill, many businesses affected by data breaches offer free credit monitoring services to customers for a specified period of time after they occur. These and other perks – such as discounts or service promotions – help regain customer trust and loyalty. However, they do so at a cost.
  • Bankruptcies and business closures. It’s also the case that a number of small businesses have to shut down within a few months of a data breach. From stolen resources to the expense of responding to a cyber-attack, these incidents have the potential to deplete the savings of the most promising small business.

Though cyber-attacks can have these and other grim consequences for your company, cyber liability insurance provides valuable resources to help regain what your business may have lost.  If you have questions about this subject give Mosaic Insurance a call at 928-458-7374.

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