Do I Need Cyber Liability Insurance for My Business?

Cyberattacks aren’t just a problem for big corporations anymore. Every 39 seconds, a cyberattack happens, and 60% of small businesses shut down within six months of a breach!

So, do you actually need cyber liability insurance? Or is your general business insurance enough?

Stick around, because in the next few minutes, we’ll break it all down—why cyber liability insurance matters, what it covers, and whether your business REALLY needs it. Let’s dive in!

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Do You Need Cyber Liability Insurance?

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Introduction

Hello, business owners! Today, we’re talking about something many business owners are underinsured for—Cyber Liability. I’ve spoken with so many business owners who think this doesn’t apply to them… until it’s too late.

Just a few months ago, we spoke with a business owner who lost $17,000 to social engineering. Their old insurance agent didn’t cover them properly, and they had to eat the loss… Ugh.

So, let’s talk about why cyber liability insurance is essential for your business.

Why Your Business Needs Cyber Liability Insurance

Cyber threats are skyrocketing! Did you know:

• A cyberattack happens every 39 seconds.

• 60% of small businesses close within six months of a major attack.

• The average cost of a data breach in the U.S. is over $9 million!

Here’s the scary part: your general business insurance does NOT cover cyber risks! That means if a hacker locks you out of your systems or steals customer data, you’re on the hook for all the damages.

But don’t panic—this is exactly why cyber liability insurance exists. It’s like a safety net for your business in the digital world.

Key Reasons Why You Need Cyber Coverage

Let’s break it down further. Why should you invest in cyber liability insurance? Here are four key reasons:

1. Financial Protection

Cyber insurance covers costs associated with a data breach or cyberattack. This includes:

• Incident investigations

• Notifying affected parties

• Credit monitoring for impacted customers

• Legal fees and regulatory fines for non-compliance

2. Reputation Management

A data breach can destroy customer trust and damage your brand’s reputation. Cyber coverage often includes public relations and crisis management services to help you navigate the situation and rebuild confidence.

3. Business Continuity

Cyber insurance helps your business recover faster when an issue arises. It covers:

• Data restoration

• System repairs

• Enhanced security measures to prevent future attacks

• Keeping your operations running smoothly

4. Legal Compliance

Did you know certain industries and regions require businesses to protect customer data? Cyber insurance helps you meet these legal requirements and avoid costly penalties.

Think of cyber insurance as your digital safety net—protecting your finances, reputation, and business operations!

What Cyber Liability Insurance Covers

Alright, let’s talk about what cyber liability insurance actually covers. There are two main types of protection:

First-Party Coverage

First-party coverage protects YOU and your business directly. It includes:

• Data breach investigations

• Customer notifications

• Business downtime and lost revenue

• Ransomware payments and system recovery

Third-Party Coverage

Third-party coverage protects your clients and partners if they sue you after a cyberattack. It covers:

• Legal fees and regulatory fines

• Lawsuits from customers whose data was stolen

• PR and reputation management 📰

It’s like having a digital shield around your business!

What Cyber Insurance Does NOT Cover

Now, before you rush out to get cyber insurance, let’s be clear—it doesn’t cover everything. Here are some key exclusions:

• Criminal charges – If your company is sued for negligence, that’s on you.

• Employee fraud – If an employee intentionally leaks data, your policy won’t help.

• Power or Internet outages – If your Wi-Fi goes down, cyber insurance won’t foot the bill.

That’s why you need to read the fine print and pick a policy that actually fits your business.

How to Choose the Right Cyber Liability Policy

Okay, so how do you actually choose the right cyber liability insurance? Here’s what to look for:

• Assess your risks – Do you handle customer credit cards or personal info? If yes, you need coverage.

• Check the exclusions – Make sure important threats like ransomware are covered.

• Consider add-ons – Some policies offer extra protection for phishing scams or social engineering fraud.

• Compare providers – Not all cyber insurance policies are the same! Work with an expert to find the right fit.

Remember, the goal is to minimize risk and maximize protection. You don’t want to be caught off guard!

Final Thoughts: Is Cyber Insurance Worth It?

So… do you need cyber liability insurance? The answer is an absolute YES if your business:

1. Relies on digital data

2. Stores customer information

3. Sends money via electronic checks or ACH

4. Would be financially devastated by a cyberattack

Don’t wait until it’s too late! Protect your business before hackers make you their next target.

Trailstone specializes in cyber insurance and commercial insurance risks, so if you want help picking the right policy, give us a call or click the link below to get started.

See you next time!