The world is connected in ways it’s never been before. While this opens up endless business possibilities, it also introduces significant risks. Cybersecurity threats are now a constant concern. Data breaches, phishing schemes, and ransomware attacks are happening more frequently, targeting both large corporations and small businesses alike.
At our Maryland insurance agency, we’ve seen the growing need for cyber liability insurance among local businesses, especially in sectors that handle sensitive data like healthcare. The consequences of not having the right protection in place can be devastating. Cyberattacks don’t just impact finances, they can destroy a business’s reputation and customer trust.
Below, the trusted insurance professionals at Unity Insurance discuss why cyber liability is more important now than ever before.
What is Cyber Liability Insurance?
Cyber liability insurance is a policy designed to help protect businesses from risks associated with online activities and data storage. This coverage can offer a financial safety net in the event of data breaches, hacking incidents, or other cyber threats. The types of protection typically offered include:
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First-party coverage addresses losses to your business due to cyberattacks. This might include lost revenue, costs to repair systems, or paying ransomware demands.
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Third-party coverage helps with legal expenses if a customer, partner, or vendor files a claim due to a data breach involving their information.
As a small business insurance agency, we help tailor policies for businesses that deal with sensitive data. The medical industry, for instance, handles vast amounts of patient information.
Why Small Businesses are Targeted
There’s a common misconception that only large corporations are at risk of cyberattacks. The reality is that many small businesses, including medical practices and other healthcare providers, are prime targets. Why? Cybercriminals often view small businesses as easier targets due to their limited cybersecurity infrastructure.
Our experience as a Maryland-based insurance agency shows that medical practices often face high risks. The healthcare industry is responsible for protecting sensitive patient information under regulations like HIPAA (Health Insurance Portability and Accountability Act). A breach could result in costly penalties and a loss of trust among patients and partners.
Without adequate cyber liability coverage, the fallout from an attack could be catastrophic. Legal fees, fines, and the cost of repairing damaged systems add up quickly. A well-tailored policy can mitigate these risks.
Real-World Examples of Cyber Threats
While hackers do not exclusively target medical malpractices the healthcare industry can be a particularly lucrative industry to target. According to one report by IBM, the average healthcare breach costs over $10 million.
Recently, Change Healthcare experienced a significant security breach that disrupted payment processing and claims. This cyberattack paralyzed clinics nationwide, impeding the flow of billions of dollars in transactions between doctors, hospitals, pharmacies, and insurers. The repercussions were far-reaching, pushing some clinics to the brink of financial instability as they struggled to cover overhead expenses without the ability to process claims.
These situations are becoming more common. At Unity Insurance, we understand the unique challenges faced by medical practitioners in a digital age. From patient records to financial data, we know that the information stored within medical practices must be increasingly shielded from malicious actors. Cyber liability insurance is specifically designed to protect businesses against the financial and reputational repercussions of data breaches.
What Does Cyber Liability Insurance Cover?
Cyber liability insurance covers resolving a cyber attack as well as costs related to incident response, such as hiring forensic experts to determine how the attack happened. It may also cover public relations efforts to manage the fallout and protect a company’s reputation.
Some common coverages under cyber liability insurance include:
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Data breach costs: Covering expenses related to notifying affected individuals, offering credit monitoring services, and legal fees.
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Network security: Helping to recover financial losses from hacks, malware, and other cyberattacks.
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Business interruption: Compensating for lost income due to systems being down after a cyberattack.
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Regulatory fines: Covering penalties related to data privacy regulations like HIPAA.
How to Protect Your Business From Cyber Liability Risks
While cyber liability insurance is critical, it’s not the only defense. Implementing strong cybersecurity practices is equally important. Businesses should proactively:
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Train employees to recognize phishing emails and other social engineering attacks.
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Regularly update software to protect against the latest vulnerabilities.
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Back up data frequently and store it securely offline.
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Limit access to sensitive information and use two-factor authentication where possible.
These preventative measures can reduce the likelihood of an attack. However, if one occurs, having cyber liability insurance means your business won’t be left vulnerable to the financial fallout.
Why It Matters for Maryland Businesses
Many Maryland businesses, especially in the medical field, face strict regulatory requirements for protecting sensitive data. Violations of these regulations can result in hefty fines and legal consequences. Cyber liability insurance can help cover these costs, ensuring that a business doesn’t face financial ruin because of one mistake or malicious attack.
We often work with businesses in Maryland who don’t realize how exposed they are until it’s too late. Investing in cyber liability insurance ultimately helps protect your business’s long-term viability. Protecting your business with cyber liability insurance is one of the smartest moves you can make, especially if you operate in a sensitive industry like healthcare.
Don’t wait until it’s too late. Invest in the right protection now to secure your business’s future in an unpredictable digital world. Contact us today and let us help you create a comprehensive coverage package that sets you apart from the rest.
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.