Cybercrime and Legal Expenses: Is Your Small Business Fully Protected?

Cybercrime and Legal Expenses: Is Your Small Business Fully Protected?

When you first opened your business, you likely purchased business insurance to protect you against losses due to fire and theft, the sudden breakdown of critical equipment, or errors and omissions that had a negative financial impact on your customer.

However, as comprehensive as these insurance products are, you might consider purchasing additional specialized coverage to protect you against the growing threat of cybercrime, as well coverage for legal expenses in the event your business is involved in a lawsuit.

 Cybercrime: A Rising Concern

If you run a small-to-medium size business (SMB), chances are you’re storing and holding electronic data that contains sensitive information. No matter how much you safeguard that data, you’re at risk for cybercrime.

According to the Canadian Chamber of Commerce, cybercrime costs Canadian businesses $3.12 billion per year. Ransomware and other website attacks have also risen by as much as 250% since 2016.

A common misconception about cybercrime is that small businesses are too insignificant for criminals to worry about. However, StaySafeOnline.org notes that SMBs are the victims in over 70% of cybercrime cases, while Visa reports that 95% of credit card breaches involve SMB customers.

Data breaches can happen in any number of ways, including:

  • Downloading a virus that takes away your access to critical data
  • Loss of a device containing sensitive customer information
  • Corruption of a critical database by malware

No matter which industry you’re in, the risk to your SMB is quite substantial. You can help protect your business from losses that result from a cyber attack with cyber risk insurance.

Cyber risk insurance offers a wealth of coverage for your business, including:

  • Incident response expenses
  • Data recovery expenses
  • Business interruption
  • Extortion
  • Network security and privacy liability
  • Internet Media Liability
  • Regulatory Expenses

As a policyholder, you may also be entitled to consultative services that cover proactive measures to protect your business, as well as reactive assistance if your business should fall victim to a data breach, such as:

  • Pre and post privacy breach services
  • Incident response planning
  • Crisis management
  • Notification assistance
  • Media relations consulting
  • And more

Take the initiative against the growing problem of cybercrime before it brings your business – and professional reputation – to a standstill.

Legal Expenses Insurance

Just the mention of the word “lawsuit” can send a chill up the spine of any business owner. Unfortunately, lawsuits can happen to any business, but you can help offset most legal expenses that come from this type of legal action with Before the Event (BTE) legal expenses insurance.

Before the Event (BTE) Insurance

BTE insurance is much like other types of insurance, in that you purchase it in case you take legal action against someone, or if something happens that results in legal action being taken against your business. It’s a great option for SMBs who don’t have in-house counsel.

The types of cases BTE insurance covers include:

  • Employment disputes
  • Contract disputes
  • Tax disputes (including audits and appeals)
  • Violations of certain statutes, e.g., anti-spam laws
  • Suspension or cancellation of business-related licenses
  • Property issues, e.g. to pursue claims related to physical damage and trespass
  • Defense in certain criminal prosecutions, e.g., breaches of occupational health and safety legislation

For these types of cases, BTE insurance will cover legal expenses such as:

  • The insured party’s lawyer’s fees
  • Disbursements (including expert witness fees)
  • Court costs
  • Any opposing party’s legal costs that the court orders the insured must pay

Although coverage under BTE insurance is quite broad, it does not cover the cost of damages you might have to pay if you lose your case.

Check Your Commercial Insurance Policy

By closely reviewing your commercial insurance policy, or discussing it with your broker, you’ll know if your business is already covered for cybercrime or legal expenses. The important thing is to never assume and then find out too late that you had insufficient coverage when you needed it the most.

Start Saving with Merit Today!

Make sure that you, your family, your property, and your business are fully protected. Call your Merit broker for a quote today at 1-800-563-3383 or contact us online.  We’ll customize a homeowner and property, vehicle, or business insurance policy with affordable rates and deductible options that meet your needs.