How much would it cost your business to shut down for a week? How much would it cost your business to shut down for a month? Employees unable to get work done, unable to complete sales orders or deliver products to your customers? For some businesses, the answer to that question can be in the millions.
Traditional property insurance has provided business interruption loss protection for some time. When a covered loss happens to a declared property, business interruption coverage pays out to the business owner the loss of income suffered from being unable to conduct their usual business. This type of coverage has saved many businesses from bankruptcy in the wake of fires and natural disasters. It only applies, however, to causes of loss that prevent the insured from using their actual physical location.
Today, more and more companies have operations that allow their employees to work from anywhere. Employees can work from home and use a virtual private network to accomplish the same tasks on a computer they could complete at the office. This increased mobility and connectivity means that for many companies, the dangers of being locked out of their physical office location is much smaller than it used to be.
The dangers of being locked out of their computer systems and networks is much greater, however. In the wake of some type of cyber event, such as a massive data breach or ransomware attack, companies could find their cyber networks unusable for weeks at a time. This has the potential to grind many businesses to a halt the same way a fire that struck their office building would. Could your business survive such a cessation of activities?
Traditional property insurance will not provide business interruption coverage in the wake of a cyber loss. As stated above, property insurance only reacts to physical damage caused by a covered peril. Instead, more and more companies have turned to cyber insurance to provide some form of business interruption loss. Cyber business interruption coverage can function in much the same way as traditional property-related business interruption coverage by compensating a business for the loss of income that results from that business being unable to conduct their normal affairs in the wake of a covered cyber event locking them out of their system.
Industry surveys have shown more and more companies listing cyber-related business continuity risks as one of their chief concerns. While massive data breaches at corporate behemoths may grab more headlines, smaller and medium sized companies are more likely to suffer negative consequences from interruption to their cyber networks. To mitigate against this, businesses to consider purchasing a cyber insurance plan that provides for business interruption coverage.