The risk of a cyberattack—whether through phishing, ransomware, or hacking—doesn’t seem likely until you realize how frequently these events happen, even to small businesses. One day, a staff member opens an email that looks legitimate, and within minutes, your system is compromised, with critical patient data now in the wrong hands. That’s the moment when you start thinking about the costs—not just the immediate loss but the long-term financial impact.
As a Maryland insurance agency that focuses on protecting businesses, we’ve seen how cyber insurance for small businesses can offer protection against financial loss. Below, we share a few of the reasons why the coverage can be a good idea.
The Cost of a Data Breach
A data breach can result in significant expenses, both direct and indirect. Legal fees, fines for non-compliance, and costs associated with notifying affected patients are just the beginning. There’s also the potential for lawsuits if patients feel their privacy has been violated, or if it leads to further harm, such as identity theft.
For a small business, these costs can be devastating. Regulations surrounding healthcare data can be stringent and the penalties for non-compliance with HIPAA or other data protection laws can add another layer of financial strain. It’s not just about the immediate fallout but also the damage to your practice’s reputation. Once patients lose trust in your ability to protect their information, it’s hard to win it back.
How Cyber Insurance Works
Obtaining cyber insurance can help cover many of the costs associated with a data breach. From paying for IT services to recover your data to covering legal expenses, cyber insurance provides a financial safety net when you need it most. Cyber insurance can also help with costs related to crisis management, such as public relations efforts to restore your business’s reputation after an attack.
Here’s a recent example: When more than 400 dental practices were affected by a ransomware attack, the affected practices were advised to contact their cyber insurance carriers to determine coverage and start the claims process. Depending on the coverage, their cyber insurance policies may have covered the cost of hiring a professional negotiation firm to deal with the attackers, paid for data recovery specialists, or even covered the ransom payment itself. Without this coverage, the financial burden could have closed the practices permanently.
Some of the most common elements of a cyber insurance policy include:
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Data Breach Response: This includes the cost of notifying patients or clients, legal fees, and public relations services to repair reputational damage.
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Regulatory Fines: If your business is found in violation of data protection regulations, cyber insurance can help cover the fines imposed by regulatory bodies.
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Ransomware Payments: In some cases, it may be necessary to pay a ransom to regain access to your data. Cyber insurance can cover these payments.
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IT Forensics: You’ll need experts to determine how the breach occurred and how to prevent it from happening again. This can involve significant costs, but a cyber insurance policy typically covers these services.
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Business Interruption: A cyberattack can lead to downtime that prevents your business from operating. Cyber insurance can reimburse you for lost income during this period.
Why Small Businesses Are Targeted
There’s a common misconception that cyberattacks primarily target large corporations. While it’s true that larger companies have more valuable data, smaller businesses are often seen as easier targets because they may not have the same level of cybersecurity in place. Hackers know that small businesses often lack the resources for advanced security systems, making them more vulnerable.
As a small business insurance agency in Maryland, we’ve found that many of our clients in the medical field underestimate their risk. Whether it’s a small doctor’s office, a dental practice, or a local physical therapy center, these businesses handle a large amount of sensitive information that makes them appealing targets for cybercriminals.
Choosing the Right Cyber Insurance Policy
When selecting a cyber insurance policy, working with a small business insurance agency that understands your industry is the first step. Medical practices face unique risks, and a generic cyber insurance policy may not provide the coverage you need.
As a local Maryland insurance agency, we specialize in helping small businesses in the medical field find the right coverage. We understand the challenges you face and can recommend policies that fit your unique needs. Cyber insurance may seem like just another expense, but compared to the cost of a data breach, it’s a smart investment in the future of your practice.
Connect with us today to work with a small business insurance agency that understands the risks.
Speak With An Agent At Unity Insurance About Your DC, Virginia, Delaware, and Maryland Insurance Needs Today
Unity’s insurance professionals serve as your advocate from the very beginning. From selecting coverage to filing a claim, we are by your side every step of the way. At Unity Insurance, we know insurance plays a vital role in every stage of your life and business so our professionals provide guidance and support to ensure you make the right decisions regarding your insurance options.
We work with clients in Maryland, Delaware, DC, and Virginia to provide the best plan for individual needs. Call 410-539-6642 to learn how the experienced insurance professionals at Unity Insurance can assist you.