A recent Symantec study revealed that even though cybersecurity is a hot topic on the news, 77% of small business owners in the US do not have a cyber liability policy. These numbers are staggering, as it’s enough to look at any recent cybersecurity scandal to see the financial devastation that can follow a cyber breach.
With states tightening the privacy notification laws, it’s more important than ever to protect yourself from the financial fallout of a cyber-attack.
So, why don’t many small businesses purchases cyber liability insurance?
In this blog post, we delve deeper into the most common reasons that most businesses decide to take on the cyber risk themselves instead of passing it to an insurance company.
3 Reasons Why Competitors Don’t Buy Cyber Liability Insurance
Hackers won’t target me
Probably the biggest misconception of all is the conviction that cybercriminals have “bigger fish to fry” so to speak than going after small businesses. In fact, small business is targeted just as often as their larger counterpart. Cybercriminals are smart. They realize that small business will operate under the mistaken assumption that they won’t be hit, so they are likely to have fewer cybersecurity measures in place. The bigger companies such as Apple, Target, etc. employ whole departments that deal solely with cybersecurity. Of course, they are not immune to cyber-attacks either (an Equifax cyber breach scandal for example).
It’s important to realize that small businesses make the best targets for the criminals, precisely because they usually pour all their funding into product and development leaving their cybersecurity lacking.
Too complicated
Many insurance carriers now offer cyber liability insurance product. The problem is that with new cyber risks constantly developing it’s hard for an insurer to offer a standard form. As a result, many companies offer various features in their policies and use different terminology in their customized policies. This makes it hard for customers to compare the policies.
Simply said it’s too complicated and frankly, it’s hard to blame the customers for feeling this way.
Sufficient Coverage
Another reason that customers pass on purchasing the insurance is that unless you are an internet security specialist, it can be hard to quantify your risk and ensure all your exposures.
As a result, the doubt always remains – did I cover all my exposures? Am I paying the right amount for the right coverage?
It is a big worry for any business, to possibly be on the hook for a significant loss that is either not covered at all or only partially covered.
Conclusion
Above we included the top three reasons, most businesses do not buy cyber liability insurance. Unfortunately, ultimately it can be their downfall. As irrelevant or complicated the policy seems, if a cyber breach happens (and there is a good chance that eventually it will), it can very well bring your business to a screeching halt. Did you know that 60% of small business shut down after a cyber breach? This is because the financial implications are devastating.
Don’t let it happen to you! Talk to CyberDot today!