Protect your business reputation with cyber insurance

Running a business is hard enough without worrying about cyberattacks. But with cyber threats on the rise, small businesses in Canada are increasingly at risk of having their data stolen, which can be very expensive and cause great damage to a company’s reputation. 

That’s why every business owner should consider investing in cyber insurance.

The rise of cyber threats in Canada

As society becomes more dependent on data and technology, we also become more vulnerable to anything that risks the safety and stability of those systems. Cyber security threats have skyrocketed over the past decade. 

The annual Cyber Security Survey conducted by the Canadian Internet Registration Authority (CIRA) and published in October 2024 found that nearly 44% of organizations experienced a cyberattack from late 2023 to late 2024. 

Companies don’t recover from these attacks easily. Did you know that 60% of small companies fold within six months of a major data breach? 

This is partially because cyberattacks are so expensive. 

Recovery from a data breach often requires a business to spend money on lawyers, public relations experts, credit monitoring for customers, and more. In 2022, more than 60% of cyberattacks caused at least $100,000 in damage. 

While nobody likes to lose money, large corporations can bounce back from a loss like that without much long-term impact. However, that kind of unplanned expense can mean bankruptcy for a small business. In a country where 43% of cyber-attacks target small businesses, the importance of taking proactive steps can’t be overstated.

Cyberattacks are also causing serious reputational damage to businesses across the country. In fact, 28% of companies that suffered a cyberattack also experienced damage to their reputation – six times the number reported back in 2018. 

Companies are losing customer trust and credibility, which can be incredibly damaging to a business. If your customers believe their data isn’t safe with you, they won’t hesitate to take their business elsewhere. 

This makes it clear – reputation is everything. Once it’s tarnished, it’s a long, tough road to recovery, and that’s where cyber insurance comes in. 

The importance of protecting your business reputation against cyber security threats

One reason reputation is so fragile is the power of social media and online reviews. A single unhappy customer or leaked piece of information can go viral in minutes. Once the public starts questioning your company’s integrity, it can take years to rebuild the trust you’ve lost.

While larger corporations may have the resources to handle such PR nightmares, small businesses are particularly vulnerable. Hackers know small businesses often don’t have the same level of security as big companies, making them easier targets. 

That’s why protecting your reputation with a safety net like cyber insurance is no longer a nice-to-have; it’s a must-have. And organizations are taking notice. 

The 2024 Cyber Security Survey found that 82% of companies now have coverage to protect against cyber security threats, which is up significantly from the 59% who were covered in 2021.

What is cyber insurance for businesses?

In simple terms, cyber insurance is a type of coverage that helps protect businesses from the fallout of cyberattacks. Whether you’re concerned about data breaches, ransomware, or other cyber security threats, this type of insurance is designed to cover costs associated with these incidents.

Now, you might think, “I already have business insurance – why would I need cyber insurance, too?” 

The key difference here is that traditional business insurance typically doesn’t cover losses related to data breaches or cyberattacks. Cyber liability insurance is specifically tailored to address these gaps, offering protection where other policies fall short.

What does cyber insurance for businesses cover?

Cyber insurance policies vary depending on the provider, but here’s a look at some common areas they cover:

• Data breaches: If your business suffers a data breach, your insurance can help cover the costs of notifying affected customers, setting up credit monitoring, and legal fees. 
• Ransomware: In the unfortunate event that hackers lock your systems and demand a ransom, some cyber insurance policies can help cover the costs of the ransom.
• Business interruption: Cyberattacks can cause downtime that grinds your business operations to a halt. Cyber insurance can compensate you for lost income during this period.
• Reputation management: Many policies offer coverage for PR efforts to help repair any damage the attack causes to the image and reputation of your business.
• Third-party liability: If your business is held legally responsible for a cyberattack that impacts clients or customers, your cyber liability insurance can help cover legal expenses. This is a specific form of liability coverage that would not be covered by your standard commercial general liability (CGL) policy.

With these coverages in place, your business can recover faster and with fewer headaches after a cyberattack. 

The bottom line

Cyber threats are not going away, and neither is the potential damage they can cause to your business’s financial health and reputation. 

But with the right protection in place – like cyber insurance – you can safeguard your business from financial loss, legal headaches, and, most importantly, lasting damage to your hard-earned reputation.

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