By: Tim Woitach
Cyber Liability remains one of the fastest growing markets in the insurance industry. Cyber risks and data breaches are frequently associated with large corporations, overlooking the opportunities in small and midsize businesses operating across multiple markets. In 2015, 43% of all phishing campaigns targeted small businesses and 72% of successful data breaches occurred in smaller companies. However, only 5% of small business indicate they carry a cyber liability policy.
Here are 5 tips to help you start selling cyber liability insurance policies to your small business clients:
Speak in relevant terms: Discussing the importance of cyber security for a small business can be a daunting task. It is important to keep your description of the policy simple and easy to understand. Don’t overwhelm your insureds with tech jargon and present a readable description of the risks and policies.
Detail the scope of cyber risks: Cyber liability insurance is crucial for businesses of all sizes. Small businesses maintain the personal information of customers but are much easier to hack, making them prime targets for cyber criminals. Cyber risks can also cause legal headaches, as businesses can be held liable for spreading viruses that originated during a cyber breach. It is essential to convey the massive undertaking it takes to monitor your information, protect against a breach, spot and stop any breach that occurs, notify the proper authorities of the crime, and mitigate the aftermath. Large organizations may have entire departments to address these issues, but small businesses don’t have the resources or capital to deal with a breach themselves.
Understand the intricacies of the coverage: Every cyber policy is different. Cyber coverages can combine third party liability with first party coverages, while others may incorporate E&O. It is essential that you know the policies inside and out before presenting an option to an insured. Make sure you work with your clients to identify their coverage needs and provide a policy that addresses each of their exposures.
Explain the supplemental benefits: Many insurance policies are perceived as simple protection and repayment following damages incurred. However, cyber policies like the ones offered by McNeil & Co. provide many more supplemental services. Insureds are provided contacts that help coordinate the crisis management efforts following a breach and provide help navigating the ensuing issues. These supplemental benefits are often overlooked and provide invaluable resources to your insureds for little to no additional cost.
Dispel the high cost perception: Small and midsize businesses carry a much smaller budget when it comes to insurance. There is a perception that the cost of a cyber liability policy is exponentially larger than the coverage it provides. You have explained the extent of the coverage and the supplemental benefits that come with the policy, but a client may still fear the cost. There are many factors that contribute to the price but you will find that a cyber policy is far from a company’s most expensive insurance cost and, given the breadth of coverage, is well worth having in the event of a breach.
As businesses continue to become more reliant on technology, the threat of a cyber breach will grow. Don’t overlook the opportunity to provide your small and midsize clients with cyber coverage to protect against emerging risks at a reasonable cost.