The Best Cybersecurity Insurance for Small and Medium Sized Businesses

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Cybersecurity Insurance for Small and Medium Sized Businesses

Cybersecurity is often overlooked by small business, but over 60% of cyber attacks are targeted at small to medium-sized businesses.

Small businesses are attractive to hackers because they usually do not have the sophisticated security systems that are in use by larger organizations. They are also likely to have more digital assets than individual users and so the potential for profiting or gaining useful information is much higher.

Many small businesses do not realize that they are vulnerable to hackers, perhaps because they don’t realise they have any data worth stealing. This can also be one of the reasons behind insufficient security practices with many businesses not realising the full effect of a data breach or ransomware attack until it is too late.

What is Cybersecurity Insurance?

Cybersecurity insurance removes some of the risk of an attack and transfers it to the insurance company. General business insurance does not cover cyber attacks and therefore will not help to recover the business costs or legal costs associated with a data breach, so cybersecurity insurance can fill an important gap.

However it can be difficult to accurately estimate the true cost of all your business data and recovery including legal costs, reputation management, customer notification and lost business after a cyber attack.

Additionally, many cyber liability insurance providers struggle to put a price on high-value company assets, or are reluctant to cover them in the first place.

This kind of cyber insurance is becoming very popular in the business world – 80% of the respondents to a survey carried out by the Risk and Insurance Management Society had bought a standalone cybersecurity insurance policy in the last year.

However opinions are divided on whether small and medium businesses really need this insurance and if the cost is a worthwhile business expense when weighed against other cybersecurity measures such as antivirus monitoring systems and data backup and recovery services. 23% of the companies surveyed were paying more than $500,000 for their policies.

When deciding whether or not to invest in a cybersecurity insurance policy, companies must evaluate carefully the full impact of a serious data breach. For example, would any level of monetary compensation be able to recover the damaged reputation of a company that had accidentally leaked personal client details?

Cyber insurance can be helpful for some businesses but it is certainly no substitute for robust security policies and procedures. Indeed, insurance companies are unlikely to pay out if they can prove that the affected company did little to protect their data in the first place.

One benefit of the emergence of these policies may be that awareness of cybersecurity is raised and organizations may well invest in tighter security measures in order to reduce their premiums and receive more coverage.

What’s the Best Way to Insure Your Data?

While cybersecurity insurance may help you to recoup some of the costs associated with a data breach, the only real way to insure your data is to make sure it is secure as possible in the first place.

Many small businesses rely on manual backup practices such as nightly backups to external storage media. While this may protect against data loss due to hardware failure, if the backups are stored in the same physical location as the original data they are still vulnerable to loss by theft or physical damage such as fire or flood.

Regular, automated cloud-to-cloud backup such as the G Suite backup service provided by Spinbackup should be an absolute essential for a business of any size and is the quickest and most cost-effective to way of recovering corporate data in the event of a data loss or corruption. Cloud backup allows small businesses a cost-effective way of backing up data to a separate physical location and provides the benefits of sophisticated security systems that were previously only available to enterprise-level organizations that had the resources available in-house.

Hackers are growing in number and malware is becoming more sophisticated all the time, so it’s almost impossible to prevent unauthorized access to company data entirely. However, management and monitoring platforms that detect and block suspicious behaviour can block any potential threats before they become a serious problem.

Business that work with Google apps may wish to consider the G Suite Cyber Security platform from Spinbackup that both assesses the security level of installed 3rd-party apps and allows an administrator to block risk apps, and provides real-time monitoring of employee behavior, issuing an alert when users are misusing G Suite and risking a potential data breach.

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