At SynchroNet, we have been following the growth of cyber insurance with great interest because it is intrinsically tied to information security. If we lived in a world where IT security measures were still sufficient to withstand most cyber attacks, we could argue that cyber insurance would not be as necessary.
Basics of Cyber Insurance for Small Businesses
Since we have already mentioned a hot dog cart as an example of a business that is not small enough to eschew cyber insurance, let's run through a few scenarios in which a street food entrepreneur would need to be protected by cyber security insurance.
Many hot dog cart and food truck operators have taken advantage of mobile e-commerce technology in order to make themselves more convenient and attractive to customers. It is not unusual to find street food vendors who accept credit and debit card payments; they do this through Point-of-Sale (POS) systems that run on smartphones, and that often include features such as seamless customer information capture for automated marketing. This is as easy as registering with a financial technology firm such as Stripe, attaching a tiny card reader to a smartphone, and installing a mobile app.
What happens when a hot dog cart vendor loses the Stripe-enabled iPhone she uses to run her business? First of all, there will be a business interruption, which may also produce loss of income.
With a cyber insurance policy that provides first-party coverage, the cart operator in our example will have an easier time recovering from the iPhone loss, because many of the associated costs will be covered.
The worst-case scenario for our hot dog cart operator is that she could easily lose her entire business to the point of not being able to recover at all, but only if she does not have any cyber insurance coverage.
How Cyber Insurance Protects You
SynchroNet reminds you that cyber insurance is one piece of the information security puzzle for modern small business owners. If your business lacks adequate IT security, you may not be able to get any cyber insurance at all. Please get in touch with our office today if you wish to learn more about protecting your business from cyber attacks and losses.