When considering insurance for companies, it’s easy to remember the obvious assets and liabilities that require coverage: auto insurance, property insurance, workers’ compensation, umbrella insurance, and the list goes on. However, one of the fastest growing insurance options is for a less tangible liability: cyber liability. Cyber liability insurance, or just cyber insurance, helps to respond to, as well as manage, the pitfalls and financial risk of cyberattacks and data breaches. Cyber insurance customarily covers legal fees, business interruption, and ransomware payments resulting from cyber incidents as well as delivers resources that provide guidance to ensure compliance with customer notification requirements.

This coverage functions similarly to other lines of insurance you’re familiar with. For example, with commercial auto insurance, policies are put in place to insure the vehicles themselves while employee training, minimizing risky behavior, and secure storage remain the strongest lines of defense in preventing any loss. But when those safeguards put in place fail, auto insurance helps to minimize the financial disruption caused by accidents, theft, and other incidents. Cyber insurance operates similarly: employees are trained to practice good digital hygiene and strong cybersecurity teams regularly maintain up-to-date business software and systems. But when these defenses fail against a near-endless sea of cyberattacks, phishing attempts, and social engineering schemes, cyber insurance provides a financial cushion.

What does not having cyber insurance mean for my business?

To grasp the implications of not having cyber insurance, it’s important to understand the exposure that may arise from cyberattacks and data breaches. Ransomware, DoS (denial-of-service), phishing, and malware attacks can impede a company’s ability to conduct normal business operations, which may result in lost revenue and irreparable reputational harm.

In the absence of cyber insurance to mitigate these risks, damages can amount to hundreds of thousands—or even millions—of dollars. Even for small businesses, the average cost of a cyberattack exceeds $200,000 [as per Microsoft, 2024], with most small businesses (60%) affected by cyberattacks going out of business within six months of a major cyber incident [Fundera, 2024].

Why is coverage important for my business specifically?

In an era where all companies use software for critical features like payroll, benefits enrollment, communication, and CRM, cyber insurance is essential to protect the integrity of your team’s and clients’ data as well as to ensure the longevity of your company’s digital well-being and digital reputation. Data breaches can severely damage a company’s reputation, and without a PR and financial plan to support your company through an event like this, the loss of that trust can haunt the company for years—or even permanently.

Additionally, while it’s easy to think that smaller companies are less likely to be targets of cyberattacks, that couldn’t be further from the truth. Often seen as low-hanging fruit with weak defenses and access to larger partners, small businesses account for 43% of all cyberattack victims. No matter the size and scope of your company, bad actors can and will target whoever comes into their sight, therefore making it imperative to be prepared to confront the worst.

I have cyber insurance, now what?

Even with the safety net of cyber insurance, maintaining proper digital health and security should remain to be a priority. First, start by always keeping software up to date and enabling automatic updates to maintain the most recent security patches. Additionally, you can enable 2FA or MFA with physical passkeys or phone verification requirements to log-in to company accounts. Lastly, regularly training employees on how to avoid falling victim to common phishing, social engineering and other cyber scams is crucial to preventing the infiltration of your company’s network.

Remember: cyber insurance is not a replacement for cyber defense, but when your defenses fail, it’s important to have a plan in place that you can rely on to secure your company’s future. By partnering with Bryson, we can help you get the appropriate coverage you need to carry into the future with peace of mind.

Want a cyber checkup?

If you are concerned that your business needs cyber insurance or wondering if your current policy has you fully covered, fill out the form below and we would be happy to help!