Being hacked is every company’s worst nightmare. You can lose thousands, if not hundreds of thousands, if hackers get their hands on your account access information. However, the immediate loss of funds is just one side of the coin. Without a comprehensive cyber security insurance policy, you are likely to accrue a slew of hidden secondary costs.
Loss of Revenue
Dealing with a security breach is often a long and drawn-out ordeal, during which you are likely to lose valuable revenue. Your regular business processes may be slowed down or completely interrupted due to:
- Internal systems malfunctions
- Equipment failure
- Electronic communication failure
- Reputation repair via communication to clients
- Content repair
Not to mention any direct financial theft that may have occurred. These secondary costs can cripple a business, especially an SMB. Fortunately, these kinds of losses are commonly covered under the first-party insurance coverage included in most cyber security insurance policies.
Repairing your relationships with clients can be an uphill battle after the loss of confidence they experience hearing that their private information was accessed during a cyber hack. Some may even choose to pursue legal action, which can cost your company big in settlements, payouts and civil awards. To protect yourself against this, you should consider including third-party coverage in your insurance policy.
If you total up these potential costs, the sum can be staggering. That’s why it is crucial to understand your company’s risks and research the various cyber security insurance options available.