Many smaller businesses have shopping cart widgets and mailing list sign-ups on their sites. Even solo businesses, such as bloggers who offer e-books or classes, will have these sections that allow customers to add sensitive data like contact information or credit card information. These site features are just as susceptible to data breaches as any other website.
A data breach is not something your customers want to deal with. This can result in litigation with you having to defend your business. Having cyber insurance can make the litigation much easier as you know you'll have this insurance policy that can pay out to both the affected customers and to you as you revamp your site and pay for more security.
Data Breaches Aren't Restricted to Large Companies
While data breaches that hit major retailers and social media sites make the news, those aren't the only breaches. Schools, hospitals, small businesses, and solopreneur sites are all in the crosshairs. You can't assume that just because you're selling a $5 e-book that no one will pay attention to your site. You have to have at least basic security to protect your customers' information, but many times, that still doesn't prevent a breach.
You Can't Assume Your Customers Will Be Understanding
Most of your customers will likely be understanding. Annoyed, yes, but they'll sigh and just make sure their credit reports are frozen. Some, however, may not be so nice, and there is always the chance that they could try to sue you, especially if the breach results in their data being misused. You could face legal and financial penalties that you can't afford to pay. In this case, cyber insurance can be a lifesaver.
Third-Party Security Is No Guarantee You Won't Be Blamed
You might think that if your site's security is handled by a third party or by the hosting service, you wouldn't be liable for any damages caused by the breach. After all, it was the other service that should have been looking out for you and your customers. If you have an angry customer, however, that might not matter. You might still face a claim. Even if the claim is dismissed later on, you'll still have to deal with the legal fallout until then.
Cyber insurance offers a layer of protection that makes your life easier while also helping your customers. It's a little-known type of insurance, but one that is quickly proving to be necessary for anyone who collects sensitive data.