Covid-19 has been levied as a curse upon us and no part of the world has escaped its raft. Many businesses have gone bankrupt and even countries with strong economies are suffering due to it. Setting up a business takes a lot of hard work and dedication is required towards it. Especially steering your business through these tough and challenging times. The world is a cruel place is what we have heard all our lives and with coronavirus in the context, sadly cybercriminals have emerged and made an opportunity for themselves out of all of this. These criminals that with the use of technology have found loopholes and ways to exploit the weak furthermore in this pandemic. According to data published, cybercriminals have tripled their phishing attacks since the beginning of the year 2020.

Cyber-attacks can occur in multiple ways and are a risk to everyone. If we look at the past, the Equifax credit office was the worst-hit company from these attacks as the cyber-criminals exposed the data of companies and personal information affecting up to 145 million in the year 2017. This cyber-attack had cost the company $700 million in repairs and legal lawsuits. If we take a look at the statistics provided by the Insurance Information Institute and J.D. in the year 2018, we see that the small companies in the United States are the most targeted by these cyber-criminals. If we look at it in numbers, around 1 in every 10 companies are attacked and 31% of companies have cyber insurance. Such breaches reported a cost of $188,400. In addition, half of the confirmed data breaches target small businesses, and 60 percent of those breaches fail within six months. These forms of attacks on small companies will vary from compromised email accounts to illegal bank transactions and credit card fraud to infringements on personal details and identity theft

Consider these real-life cyber claim scenarios:

• After receiving fraudulent instructions, a residential contractor became the victim of a social engineering attack, and wired $35,000 to criminals, believing that they were a vendor.
• A professional services company employee had a laptop stolen during a work conference. The machine held personal details for customers. The computer was protected by a password but did not encrypt information. The incident cost the company more than $20,000 in forensics and reporting expenses
• MasterCard has notified a restaurant in Washington of a breach because of a high level of fraud committed on customer credit cards that patronized their business. They were promptly required to undergo a forensic examination amounting to $11,646.90. Six months later, MasterCard notified the restaurant that they were assessing fines of $26,242 for Fraud Recovery along with an $8,000 case management fee. Two months later, Visa assessed a $5,000 fine for non-compliance. Because of this violation the restaurant has a gross loss of $50,888.90

I.I.I. CEO Sean Kevelighan said & “Learning the dangers of a company and taking appropriate care ensures a small business will invest more time charting its success relative to reacting to unexpected crises. In particular, the growing threat of cyber intrusion is growing rapidly on small businesses.”

What does Cyber insurance cover?

FIRST-PARTY COVERAGE (covers your non-legal costs):

• Investigation: A forensics investigation is necessary to determine what occurred, how to repair the damage, and how to prevent the same type of breach from occurring in the future. Investigations may involve the services of a third-party security firm, as well as coordination with law enforcement and the FBI
• Business losses: A cyber insurance policy may include similar items that are covered by an errors & omissions policy (errors due to negligence and other reasons), as well as monetary losses experienced by network downtime, business interruption, data loss recovery, and costs involved in managing a crisis, which may involve repairing reputation damage. Reputation damage can be repaired by hiring officials in crisis management, public relations, and advertising. These professionals repair the damaged reputation by building trust again with the clients.
• Privacy and notification: This includes required data breach notifications to customers and other affected parties, which are mandated by law in many jurisdictions, and credit monitoring for customers whose information was or may have been breached
• Damaged electronic data. Replacing or restoring data compromised by a breach.
• Business income and extra expenses. Replacing income lost due to a breach and covering any new expenses that arise when getting your business back up and running.

THIRD-PARTY COVERAGE (pays others if you have legal costs):

• Lawsuits and extortion: This includes legal expenses associated with the release of confidential information and intellectual property, legal settlements, and regulatory fines. This may also include the costs of cyber extortion, such as from ransomware

Do I need Cyber Insurance?

Most likely, you do. As the number of applications, devices, etc. increases, an organization becomes more vulnerable to attacks. Just like businesses insure against business problems, natural disasters, and physical risks, they need insurance coverage for cyber risks as well.

If a costly breach occurs, your company may not have the resources on hand to combat these issues or recuperate losses. Cyber insurance can provide support, so these attacks do not cripple your business.

If your business is on a small scale, then it's a more likely target for hackers. Small businesses are more prone to attacks as they have less security against cyber-attacks. According to the Verizon 2019 Data Breach Investigations Report, 43% of all cyberattacks and data breaches target small businesses.

More Stats related to Cybercrime

• 85% Data breaches (hacking and social) -- Hackers' most favorite activity is to target a small business and as it’s easy to figure out their email and client information due to weak cybersecurity. They send emails with links to be opened up by trusted clients demanding information and data.
• 36% Data breaches (misuse of data) -- Negligence by an employee could lead to data displacement. It could be a small mistake like using a public network that is not secure or losing your laptop. Misplacing the data may lead to the disclosure of important information for example credit card numbers, email passwords, etc.
• 7% involved Ransomware--Blackmailers may block your network id, or data access unless you pay them a hefty amount of ransom. The cost of ransom may not be as high as the amount of data breached would cause to the respective person hence they pay off the blackmailer

All these stats are rising up, because, with the growing technology, hacking and data breaching has become an easy way out. Unlike big established companies, small businesses are less likely to have poured time, money, and energy into state-of-the-art defenses. Only 10% use any data protection at all. And because they are also less likely to have Cyber insurance or extra cash to burn, they take a disproportionate financial hit too. Unfortunately, 60% of small businesses that experience an attack go out of business within six months.

Businesses who can't afford cyber insurance can afford an add on which is designed for small businesses.

Get a free insurance quote from Defy Insurance: https://zurl.co/FsxS