Do Startups Need to Consider Cyber Insurance?

As the owner of a startup company, you may not think that your small business is susceptible to cyber attacks. After all, you may have only a few clients, limited data, and little profit. In reality, small businesses are often targets of cyber crimes because of their limited resources. Unfortunately, your startup isn’t immune to cyber risks, which is why you should consider cyber insurance as a small business.

 

Cyber Insurance for Startups

 

What is cyber insurance?

One of the biggest risks that businesses face today is digital risk. Having an online presence, carrying out transactions, and even just storing data digitally exposes you to cyber risks. If a hacker was to access your website for a few hours or take down your network for a few days, your startup could be facing significant restoration costs as well as loss of income from your company’s downtime.

 

Cyber insurance is designed to protect you against digital business interruption, covering the costs of repairing vulnerable systems, and it can provide you with expert advice on how to deal with a security issue. A cyber insurance policy can help to cover both first-party and third-party costs for financial and reputational damage repair if data is lost, damaged, corrupted, or stolen.

 

Why do startups need cyber insurance?

When you’re building a new business, your reputation is everything. You want to build a solid client base that enjoys your services and return to you time and time again. If you’re beginning to build a book of business, you don’t want your clients’ information to fall into the wrong hands.

 

If a hacker accessed your digital storage, then your clients’ data would be at risk, and you would be left with the difficult task of letting your clients know your business has been compromised. In an instant, you could lose your clients along with the good reputation you were strategically building.

 

With cyber liability insurance, you and your clients have a safety net. You have assistance in recovering data and protecting sensitive information.

 

All businesses large and small should consider taking out a cyber liability insurance policy. Many startups mistakenly believe that won’t be targeted until they are more established. However, it is this line of reasoning that encourages hackers to target small companies. They know that these business owners haven’t developed cyber security practices, encrypted information, or have insurance in place just yet. As a result, these types of businesses are more vulnerable to threats and can face significant fallout and devastation in the event the worst happens.

 

How much does cyber liability insurance cost?

 

There are many factors that will impact the cost of cyber insurance. The higher a business’s annual revenue, the more the insurance will cost. If you’re a startup business, then you can get reasonably affordable coverage. If your startup works in a sector that is significantly more vulnerable to cybercrime, then you may face higher premiums because of the elevated risk. A good way to show you’re a good candidate for lower premiums is to install security measures, educate employees, and have reactionary policies in place.

 

The right business insurance policy should address your risks while staying in line with your budget. At J. Archer Insurance Group, our experts help you find the best coverage for your needs. Serving Houston, Texas and beyond, contact us today.

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