Cyberinsurance used to be only for large corporations, but policies are becoming available for small and medium-sized businesses. Read advice about what to consider before purchasing a cyber policy.
But there are many important differences between large and smaller companies when it comes to cyberinsurance needs. Large corporations are more likely to be targeted in hacks, buy coverage directly from insurers, and have their own legal, public relations, and technology expertise. Smaller companies are becoming cyberinsurance buyers when they work with larger corporate partners, usually shop through agencies, and typically need outside crisis management help.
So it may be a sign of the times that United Parcel Service debuted cyberinsurance coverage for smaller firms through its UPS Capital division last week.
“We are a full financial services provider,” marketing vice-president Dave Zamsky said of the Atlanta-based shipper’s unit, which opened in 1999. “We think basically because of our skills in supply chain management, particularly in the transportation form, we’re well-served to help our customers. We do a lot of research, and we stay current in what’s happening with small and medium-sized businesses.
Owners of smaller companies sometimes mistakenly believe that general business insurance covers cyberattacks, Zamsky said. It doesn’t, and a cyberattack can easily cost a small business from $80,000 to $150,000, which could be avoided with a $1 million plan costing around $3,000-$5,000 per year, he said.