Cyber Liability / Data Breach Insurance
for Retail Businesses
Did you know that in 2011, data breach in the retail industry accounted for 20 percent of all cyber attacks? That's according to Verizon's 2012 Data Breach Investigation Report.
Retail is the second most targeted industry when it comes to cyber crime, making Cyber Liability Insurance an essential piece of any retail establishment's small business insurance plan.
Read on to learn more about data breaches and how Cyber Liability Insurance can protect your retail business after a cyber attack.
Why Are Retail Businesses Targets for Cyber Attacks?
Retail businesses are the targets of cyber attacks because they have the information cyber criminals like to steal — and it's often not too hard for these thieves to take it.
Whenever an unauthorized person — like one of these cyber thieves — gains access to your retail business's network, it's called a “data breach.” Cyber criminals are attracted to the information that retail businesses process through their point-of-sale systems, including…
- Customer names.
- Credit card numbers.
- Debit card numbers.
Retail stores — even independent ones like yours — often process a high volume of this data every day, a relative gold mine to a cyber criminal. You probably already know that cyber attacks can happen remotely, meaning that the criminal never has to set foot in your shop. So how exactly do remote cyber crimes work?
A remote cyber criminal starts by scanning part of the Internet for IP addresses that look like they belong to a retailer's server. They use a software program to do this — and then they have another software program to automatically try common passwords, once they've identified a retailer's server.
When a company installs your point-of-sale system, they usually don't change its password. Retail store owners often don't think to change the password, and so it's easy for a hacker to find your password by trial and error to gain access to your system.
Once the hacker has access, they can steal your customers' information and sell it to other parties for big profits.
The thing is, many retailers, along with other small-business owners, don't realize the threat of cyber risk — or how much power they have to lower that risk. All it takes is a unique password and a firewall to encourage hackers to move on to easier targets.
But data breaches still happen even when a retail store has data security measures in place. Cyber Liability Insurance is designed specifically for these situations.
How Cyber Liability Insurance Protects Your Retail Business
Cyber Liability Insurance, sometimes called Data Breach Insurance or Cyber Risk Insurance, is a small business insurance policy that protects your real business from the high cost of data breaches.
Because data breaches usually affect hundreds or thousands of parties and can take weeks or even months to detect, the average per-record cost of such an incident is about $188, according to a 2013 report by the Ponemon Institute. Multiply that by even a fraction of your customers and you can start to see how financially devastating a cyber attack can be for small businesses.
Cyber Liability Insurance works by helping pay for the expenses related to data breaches, including…
- Cyber extortion expenses. When a hacker holds your retail business's information or website hostage, it's called cyber extortion. Your Cyber Liability Insurance policy can help you pay the criminal.
- Legal expenses. After a data breach, affected customers have the legal right to sue your retail business to recover damages they suffered. Cyber Risk coverage often helps pay for legal expenses like counsel, settlements, and judgments.
- Notification of affected parties. Your state's laws probably require you to notify affected customers after a data breach. Cyber Liability Insurance can help you pay for this expense.
- Credit monitoring services. If you'd like to offer credit monitoring services to your clients, your insurance policy will usually foot the bill.
- A good-faith marketing campaign. Data breaches often leave retail businesses with a negative public image. Your Cyber Liability Insurance can often help you pay for a marketing campaign to minimize the damage to your reputation and get your business back on track.
As the owner of a retail business, you can either purchase your Cyber Liability Insurance policy individually or as part of another policy (e.g., a Business Owner's Policy).
Cyber Liability Insurance Quotes for Retail Businesses
Are you ready to secure Cyber Liability Insurance quotes for your retail business? Then contact an Insureon agent. Or you can fill out our electronic application to receive your Cyber Risk Insurance quotes via email.