Cyber Liability Insurance: A Must For Businesses

Cyber insurance is a must for most businesses, especially now when so much business is being conducted at home and online. Cyber scams and phishing have increased by 40% in the last year alone, which is why it is more important than ever to convey to leads how vital cyber insurance is to their business. Just one cyber attack can mean a significant loss of revenue, or even the loss of their business. But before you can sell cyber insurance, you need to know exactly how it works and how to sell it.

a hand holding a cell phone with the words sign in on it and above the cell phone are the words "warning cyber attack" in large letters
Approximately 62% of cyber attacks are on small to midsize businesses.

Why Cyber Liability Is Needed

Approximately 62% of cyber attacks are on small to midsize businesses, and without cyber insurance to fall back on, most of these businesses will not have the means to survive the attack. The attack will end up costing them thousands of dollars, if not millions. In fact, the average cost of a cyber attack to a business is approximately $2.2 million.

Cyber insurance is needed now more than ever is because so many employees are currently working from home. With so many employees logging in to business’ servers through their home routers, businesses are at a much higher risk of cyber attacks – in fact, 1.8 million cyber attacks are conducted through home routers!

What Cyber Liability Insurance Covers

When speaking with clients about cyber liability protection, it is important to make clear that they may not be as covered as they think they are when it comes to cyber security. First of all, even if they have security software, nothing can stop 100% of cyber scams and attacks, because technology is constantly changing. Second of all, if they have an E&O policy, they may think that cyber events are completely covered. Unfortunately, this is not the case; these policies will offer some coverage against legal claims of negligence and errors, but not from damages resulting from a data breach. One sure thing that can help these businesses survive an attack is cyber liability insurance.

When selling cyber liability insurance, understanding the difference between first-party and third-party coverage is a must:

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  • First-party coverage: protects the data they own, such as information that pertains to the business and its employees.
  • Third-party coverage: covers liability associated with breaches of customers’ data.

Tips For Selling Cyber Liability Insurance

In order to sell cyber liability insurance, you must first be knowledgeable about the different types of policies and coverage they offer. Business owners are looking for help in finding the best policy for their specific business, which is why they come to you – so make sure you know your stuff! Here are some tips that will help you:

  • Speak In Relative Terms– Help your prospect understand the policy using simpler words, and try not to overwhelm them with insurance jargon.
  • Understand The Risks– Each business has its own risks based on its specific industry, so learn to detail the scope of cyber risks for each type of business.

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    It is important to try and find the most savings that you can for a lead, not only to sell, but to build customer loyalty.
  • Decide What Policy To Sell– Once you evaluate the business, you can decide if they need a standalone policy or a packaged policy. They might need coverage for third-party liability or you can package it with an E&O policy.
  • Find Savings– Business owners might be afraid to invest in cyber liability insurance because they are afraid of how much it will cost them. If you can find them savings and discounts, then do so. If not, then you should explain to them the importance of cyber liability insurance compared to the costs of not having it in case of a breach.

Businesses are continuing to shift toward technology and this puts them at a higher risk for cyber attacks. Knowing these risks and the importance of protecting businesses with cyber insurance, as well as following the above tips, will ensure your success selling cyber liability insurance.

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