For busy small business owners operating on slim margins, cybersecurity sometimes ends up on the back burner. But the effects of a breach can be devastating to a company’s finances and reputation. That’s why more and more businesses are investing in cyber insurance.
But is it worth the cost? The Globe and Mail asked three experts to weigh in on the importance of cyber insurance and whether it’s worth the investment.
Breaches can affect any (and every) small business
I’m often asked ‘Why do I need cyber insurance? I don’t have sensitive information that anyone would want.’
There’s a misperception that only companies dealing in technology are targets. The reality is very different. It doesn’t matter what type of business you run – whether you’re a consultant, small retailer or transportation company – anyone who collects data as part of their business operations is exposed in one way or another. It’s become a mainstream liability, and that’s why everyone should consider cyber insurance.
Start by talking with your insurance broker. They can help you understand your areas of exposure and recommend the best options to help insulate your business from cyber risk.
Cyber insurance policies are also a lot more affordable than you’d think – a small business can purchase coverage for as little as $750 a year. That’s worth it when you consider that a breach can cost you tens of thousands of dollars or more.
– Dina Godinho, partner and account executive at Jones DesLauriers Insurance Management, Inc.
Protection is always the cheapest option
Insurance will always be less expensive than what you’ll pay yourself in the event of a breach – especially when you factor in business downtime. Those costs can add up very quickly.
For example, a breach involving 150 records could conservatively total $50,000, not including any lost income. And on average, businesses are down for three to five days following an incident. During that time, you still have to pay your employees, service your customers and meet your other business obligations.
Even if you think you can cover these costs through a line of credit, there’s a lot of stress with just managing your response. You may even need the help of outside experts to get back up and running and to help manage any reputational harm.
That’s where cyber insurance can be a lifeline – not just for financial protection, but also access to resources and support to help you rebound quickly.
– Donna Millingen, underwriting expert at Northbridge Insurance
Cyberattacks pose a real threat – and small businesses require real protection
Small business owners constantly juggle all aspects of their businesses, so it’s not surprising that cybersecurity and cyber insurance can sometimes fall by the wayside. But that’s a dangerous mistake. If you fall victim to an attack and don’t have the proper coverage in place, the results can be debilitating. In some instances, a breach can even put you out of business.
Even if you don’t have a dedicated IT department or in-house cybersecurity expert, you don’t have to go it alone. There are lots of resources available to small and mid-sized business owners when it comes to cybersecurity. Associations like the Canadian Federation of Independent Business can provide access to tools, training and support. For example, we’ve offered several cybersecurity webinars to help get our members started. Your insurance broker and insurance company are also great resources. They can ensure you’ve got the right coverage for your business and recommend proactive measures you can take to better protect your business.
– Dan Kelly, president of the Canadian Federation of Independent Business
Advertising feature produced by Globe Content Studio. The Globe’s editorial department was not involved.