Do Startups Need to Consider Cyber Insurance?
Do you know that 90% of organizations reported phishing attacks last year? So with continuous integration of technology and business, it is vital to consider IT security in the budget of your startup.
Do you believe that a breach won’t happen to your organization just because it’s a budding company? Well, think about it again.
In the US, about 65% of organizations faced a successful phishing attack. These stats are 10% higher than the global average. Today, almost all businesses are well integrated with technology in several ways, making them vulnerable to all types of cyberattacks. Small businesses and startups which have zero or no cybersecurity plan are easy prey to hackers.
More and more new businesses are turning to cybersecurity insurance for startups to beat this rising concern. They are seeking reliable solutions to deal with the mounting threat of cyberattacks. Traditional commercial policies may not always include or clearly define coverage against cyberattacks.
How is insurance for startups a smart solution?
Free credit monitoring
Cyber insurances monitor the credit of your customers. If your customers get affected by a data breach, the insurer takes care that their information isn’t used illegally.
It is crucial to deal with this, with assistance from an insurance company, as doing it on your own can be a big-time headache. Research shows that 58 percent of consumers after a data breach want companies to step up and provide credit monitoring, identity theft protection, and other cyber-security solutions. It proves to be a big step toward winning back customer trust and retaining them. When moving ahead, make sure with the insurance provider if they include this service.
Cover legal cost
After a data breach, customers could sue your business, and as a result, the legal cost piles up uncontrollably.
Generally, cyber liability insurance for startups reimburses your significant legal expenses like lawyer fees and settlement costs. These expenses exceed the budget of most startups, and having insurance can help you avoid a huge financial blow.
PR expert to repair your business prestige
After a data breach, the highest and intangible cost a company has to bear is damage to its brand position. Typically, insurers hire skilled PR experts to rebuild and preserve your reputation. Irrespective of the size of your business, these can help you rebuild your market reputation and credibility.
Timely recovery of lost income
An unexpected pause to your business due to a data breach can greatly impact your business operations. It can make your company lose the revenue that it would’ve earned in due course.
Many startup businesses don’t have huge cash reserves – they rely on consistent cash flow. Therefore a pause of income for a few months can be disastrous to many small businesses. However, having good cyber insurance for a startup is a recovery measure that could create a huge difference and keep you up and running despite the unfavorable turn of events.
Insurers arrange a consultation with IT professionals to identify the root cause of the issue. The IT forensics team also assesses what measures need to be taken to prevent all sorts of future data breaches.
If you still doubt if your startup needs cybersecurity insurance, make yourself aware that a business takes somewhere around 206 days to know if they’ve been breached in the first place. Consider the damage hackers can do within 206 days, and you’ll realize what needs to be done.
Contact James Page Insurance today in case of any additional questions about business insurance for startups.