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Cybersecurity Insurance to be Considered by Small Businesses

Cybersecurity Insurance to be Considered by Small Businesses - top government contractors - best government contracting event
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Cybersecurity Insurance to be Considered by Small Businesses - top government contractors - best government contracting event
NIST image

Companies are taking any and every precaution to protect their information from cyber attackers.

The Washington Post recently reported that while data loss decreased from last year, breaches have reached their highest numbers due to cyber criminals attacking smaller businesses.

Matt Cullina, chief executive of business and data risk management firm Identity Theft 911, suggested to the Post that small firms do their homework regarding cybersecurity insurance.

“Most small business packages don't cover data breaches or really anything data related,“ Cullina said. “Many have an exclusion called the “˜intangible property exclusion,' which basically says data is intangible. You can't touch it, you can't feel it, so if it's damaged, there's no way to calculate the cost to replace it later.“

He added that some vendors are expanding their services to include cybersecurity insurance. Chubb Group of Insurance Companies recently added cybersecurity insurance to its services. Cullina suggested that small businesses consider the coverage since companies are expanding their services.

IDT 911 Senior Vice President Brian McGinley told the Post that while cybersecurity insurance is fine, companies should take preventative measures to protect their business and data.

“You have to demonstrate that you understand your network structure and your vulnerabilities, use updated anti-virus software, and that you have some semblance of documentation,“ McGinley said. 

The Post noted the types of coverage currently available. First-party coverage handles the cost a company has to pay in response to the loss of information about clients or employees. Third-party coverage covers legal defense costs, fines and penalties. 

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