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Cyber Insurance is a specific type of policy that provides coverage to a business in the unfortunate event of a data breach, or other cyber crime, that would result in the compromise or theft of sensitive customer information.

While we often hear of these types of crimes involving very large corporations, most business owners don’t realize that 55% of all small businesses in the US have experienced a data breach. Once a breach is discovered, a business is required by law to notify each customer involved, they may have to pay for credit monitoring for each of those customers, and they can also be responsible for the restoration of an affected customer’s personal identity. Also, there may be other legal fees and costs to repair damaged computer systems. Not one of those expenses is covered under a business’ general liability policy.

A cyber insurance policy helps a business save its reputation by providing money to pay for those losses, which can be very substantial, sometimes well into the hundreds of thousands of dollars, depending on how many customer records were compromised. The national average cost per customer record is $141, so it doesn’t take many compromised records to add up an unmanageable sum.

 Cyber insurance should be part of the discussion when your business policy is reviewed with your agent, if only to gain a firm understanding of your risk, what policy options and limits are available, and how much those policies cost. I promise that premium will cost far less than the cost to respond AFTER a breach occurs. Is that a chance you want to take with your livelihood?

MHJ Insurance is a full-service agency and we have options for cyber-security policies as well as many other type of insurance you may need.