Cyber Insurance for Small Business Canada [Importance & Benefits]

Are you a Small Business in Canada? If yes, then this article about Cyber Insurance for Small Business Canada 2022 is going to be very informative for you. In this article, we will talk about the importance of Cyber Insurance. Moreover, you will learn about the different aspects of Cyber Insurance for Small businesses in Canada. 

Cyber Insurance for Small Business in Canada

Many Small business owners in Canada take Cyber Security very lightly. If you are running a business, you must have a website or app. If any individual or a group of cyber hackers takes control of your website or app, then your entire business may collapse.  

A small survey conducted by Symantec, The National Cyber Security, and Small Business Authority suggests that approx 60% of small businesses affected by the Cyber Attacks closed permanently within 6 months. 

In fact, in the era of evolving technology, each and every company and business in Canada is highly prone to cybercrime threats, regardless of their size. 

It is because almost every piece of crucial data, clients, files, and other business-related information is potentially available online. This makes it easy for cybercriminals to access the breach into the privacy of your business and get access to every piece of confidential data regarding your clients. It also might lead to a considerable loss of reputation, making you and your company suffers a lot. 

All this has provoked companies and businesses to upgrade their cyber security and networking protocols as quickly as possible. 

10 Tips to enhance the Cyber Security of your business

In recent years, cyber security has become essential as ever. With increasing threats to companies as businesses, it is of absolute importance to empower the robustness and efficiency of your security solutions. 

Here are a few tips to enhance the cyber security system of your business: 

1. Train Your Staff On Cyber Security Principles:
2. Keep The Software & System Up-To-Date: 
3. Endpoint Protection:
4. Installing a Firewall: 
5. Backing up your data: 
6. Controlling access to your system: 
7. Wi-Fi Network Security: 
8. Personalizing Employee Accounts: 
9. Access Management: 
10. Passwords and authenticity: 

Cyber Attack: A Growing Business Concern

Cyber Attack refers to a sudden, deliberate action made to damage, infect or exploit your network or system. The attack is made via corrupted codes that comprise your system in order to leak, steal or capture crucial information or data. 

Cyber Attack Prevention has become a growing concern for several businesses and organizations. The common attacks and data breaches faced by businesses, companies, and organizations include identity thefts or frauds, malware, spamming, phishing, trojans, viruses, stolen hardware, service denials, access breaches, password sniffing, system infiltrations, website distortion, private & public browser exploitations, quick texting abuses, unauthorized access IP (Intellectual Property) Thefts, etc.   

The success of such violent cyberattacks can cause a huge impact in damaging the business in three main ways:

Financial Damage: Businesses tend to suffer significant economic losses due to cyberattacks and security breaches. This happens due to stolen corporate data, financial information like bank or card details, and money. Cyberattacks also disrupt trading by stopping online transactions and cause huge losses of business contracts. 

Reputational Damage: Cyberattacks result in damaging the buildup reputation of a business within seconds. This leads to the loss of trust from the consumers, which reduces the sales and profits of the organization. It also affects the relationship with the suppliers, partners, investors, clients, and other third parties linked with the business. 

Legal Damage: The laws of privacy and data protection make it essential for any business to manage the private data of their staff or customers properly and keep them secured. Deliberate cyberattacks or data breaches compromise all confidential information, getting the businesses fined or dealing with regulatory sanctions.     

Why Small Businesses Need Cyber Insurance?

It has been seen that many small businesses in Canada are unable to afford the large amount required to stop the issue of privacy breaches, comply with regulations by notifying the clients, replacing the missing data, and dealing with possible damage to reputation. It has been disheartening to see that only a few such businesses have access to formal security policies for their employees. Half of them lack even the most basic cyber security measure.

 A handful of the owners feel the requirement for allowing test check-ups to ensure whether or not their systems are free of any kind of hacks. A lot of small businesses do not back up their data in more than a single place.

Of all these, Canada has made cyber insurance a necessary risk management scheme in most of its businesses. With this, several small and large companies will be able to self-finance all the required high-priced cyber security actions legally. This will reduce the risk of cyberattacks that deliberately exploit your system and network.

How Can Cyber Liability Insurance Help?

Cyber Liability Insurance, also known as Cyber Insurance or Cybersecurity Insurance, refers to a contract that can be purchased by a business, company, or organization in order to decrease the financial risks caused by online threats. Such insurance helps to cover almost every expense associated with a violent cyberattack that damages your organization’s customer data and technology system.

Due to the increasing number of cyberattacks becoming more and more common, cyber liability insurance has become an emerging and essential challenge among several companies and businesses. Once a cybercriminal or hacker is able to infiltrate the business network, they will be successful in taking over websites, stealing confidential client information, and holding the data a hostage. For this incident, you and your company will be held liable and take full responsibility for the recovery expenses.  

If your Wi-Fi network and data are compromised, and normal operations are halted, cyber liability insurance can help pay for interruption related expenses such as:

Incident Response Cost: The coverage cost for a dedicated team or response hotline which assists in dealing with the cybercrime incident 24/7. 

Forensic Investigation Costs: The coverage cost expenses for hiring forensic investigation experts to look into the matter of cyberattack. 

System Damage and Restoration Costs: The coverage expenses required for repairing and restoring all the damaged systems and software caused due to a sudden cyberattack event. 

System Business Interruption Cost: The coverage costs for sustained losses caused by a system outage or service interruption due to a cyberattack.  

Social Engineering Cost: The coverage expenses requirements at times when a staff member is deceived into leaking access to a system or sending funds to a fraudulent bank account.     

Regulatory Defence Cost: The expenses covering the incurred fines in response to administrative proceedings caused by networking security or privacy breach.  

Legal and Civil Damages Costs: The legal and civil representation coverage costs for possible damages from any network security or privacy breach. 

Security Breach Remediation and Notification Costs: The coverage expenses for notifying all the affected parties as well as managing privacy breach incident. 

Device program and electronic data restoration Costs: The coverage expenses required for recovering and restoring all the corrupted and damaged data resulted from service denial attacks, ransomware, or privacy breach. 

E-commerce extortion and reward payment Costs: The coverage cost expense given to a professional negotiator or an organization threatening you or your organization.   

What To Expect When Applying For Cyber Insurance?

In case your business or organization is in a primary stage of adopting a cyber insurance policy, here are some of the things which you must expect and consider before applying for the insurance: 

Creating the Policy:

You must question whether or not the cyber insurance coverage is a complete newly planned policy or it is an extension of an already existing policy. A majority of the cyber insurers serve a customizable policy which serves as a more cost-effective option.

Understanding Coverage:

You consider asking if the coverage is inclusive of both the first and the third-party service providers. Third parties are essential in providing a path to sensitive company data and thus must be added into your cyber insurance policy. 

Employee Liability:

You must know whether not the cyber insurance coverage is applicable in cases of cyber attacks caused by spiteful employee activities. You must also learn if the insurance could be applied for social engineering attacks like APT (Advanced Persistent Threats) and spear phishing. 

Threat Timelines:

Since cyber attacking threats usually take time to get discovered, you must learn if there are any particular time frames or limit expectations for the coverage to come into effect. 

Scope of the Policy:

Lastly, you must question the scope of your policy. You must learn if the policy is only applicable for targeted attacks or completely covers any sort of subjected security events faced by the organization.     

Coverage Application Insights For Cyber Insurance in Canada

Complex cyber risk can add up to a complex insurance application process. A recent Coverage Insights by Zywave notes, “The application process for cyber insurance is both detailed and exhaustive. However, taking the proper steps before the application process for cyber insurance should reduce your data breach risk, making your organization more attractive to insurers and reducing your insurance costs overall.” 

 “For cyber coverage to be effective, it requires a high level of due diligence on the part of prospective policyholders. To get the most out of your policy, consider the following best practices when applying for cyber insurance:

The Very basics: 

One of the first things the insurers will try to know from you is the details of your organization. This will include the kind of industry your organization operates as well as the types and quantity of information stored by your organization.  

The insurers will also be noticing how you manage your data and cyber networking securities. You have to be honest and transparent while providing them all the information regarding your business’s setup and security protocols. It will help get an adequate amount of secured coverage and reduce the risk of insurance policy voidance. 

Information Security: 

Insurers will try to know whether or not you involve a proper formal program for testing and auditing the security controls of your business. They will also check if you have put the basic controls in place as well as included antivirus software, intrusion detection software, and firewall technology. 

Breach History: 

During your Cyber Insurance Application process, you must present valid, informative data of your company’s breach history to your insurer. Normally, they tend to require the vulnerability and effectiveness of your data and data security techniques in particular. 

Data Backup: 

Letting your insurer know your organization’s data backup facilities helps them get a better understanding of the risk level of your probable data loss. They will be interested to know whether or not you regularly back up the crucial data, take advantage of a proper redundant network and involve a disaster recovery plan.

Policies & Procedures: 

Yet another thing your insurers would be likely to know is the cyber security types as well as the incident response policies and procedures that your organization involves. This is due to the fact that communication helps a lot to reduce the cyber risk of your organization. The insurers will be questioning the details of handling procedure of password updates, personal device usages, and the official cancellation of network access to former employees. 

Complying With Legal And Industry-Level Standards: 

Complying with Cyber Legislations is of extreme price levels. Due to this, the insurers are likely to let you know the proper procedures required to handle all these compliances. They will indeed review whether or not you are compliant enough to go for the applicable framework regulations, utilize expired old hardware and software, or belong from any external privacy and security groups.

Any organization must be accurately detailed and specific during such a review. This would help them get a great number of reasonable terms and coverage. 

Final Words:-

With everything mentioned above, it can be concluded that cyber insurance for small businesses in Canada is an essential as well as a hectic process. However, as soon as you can complete everything required in preparing proper cyber liability insurance, your business or organization will surely be able to reduce cyberattack risks.