A fresh look at corporate insurance
Cyber attacks, security breaches, data losses…we all know we’re vulnerable. Most companies have general liability insurance. This is also called “slip and fall” coverage. But what it covers is mostly limited to things that happen to humans and stuff in the physical world.
If you use a computer and a network to conduct business, there’s another type of insurance you need to consider. Cyber insurance protects you from hacks, data losses, and security breaches that might lead to the loss of client data, or the exposure of personally-identifying information (PII) or proprietary client information. I consider this the second most important type of general insurance that every business needs.
Assess your risks
We don’t use installed software on our own laptops or servers anymore. Software-as-service (SaaS) providers that let us pay for awesome products month-to-month have been game changers for small businesses. Think Dropbox, Google Workspace, Quickbooks, Slack, and the hundred other apps you’ve come to rely on.
I’m not saying don’t use SaaS products. These companies are better at security than you are. What I’m saying is, know the risk they introduce to your business. If those companies experience a breach, you could be held accountable, as your clients expect you to keep their private information private.
If your credit card processor gets hacked, you may hold liability for the PII you passed them through your company’s e-commerce site. If you store credit card data in your own database, or if you are selling anything online, run don’t walk to add this insurance.
Even if you store files locally, if your computer is on a network, someone could access it. (Or your Intel chip might have a security flaw.) You could use an air-gapped computer for truly sensitive information, but you will spend hundreds of extra hours a year to run your company that way.
So you definitely have some risks, even as a small business. What can you do to make sure a cyber crime doesn’t put you out of business?
Protect your business
As a first step, install a virtual private network (VPN) on your phone and laptop. Even on a private network, you need an extra layer of security, but for sure on that free Starbucks or airport wifi. If you have a team, get a group subscription and provide all of them with a VPN as well.
Once you’ve done that, your second step is to determine what type of cyber policy is right for you.
Premiums are typically set based on your company’s expected annual earnings and what type of services or products you offer. Choose a coverage level that works with your budget and lets you sleep at night.
I know we’re DIY people, but in an area like corporate insurance, using a broker can be a tremendous help. An experienced broker will prepare you for the underwriting process, do the research and legwork, and help you find the coverage mix for your business and budget.