The Most Dangerous Threat No One's Talking About

(And Why That’s Great News for Your Agency)

Three out of four. For every four business owners who walk into your agency, three will not be protected against cyber-security risks. It’s a staggering number when you consider nearly half of cyber attacks that occur in the United States target small businesses. 

As insurance agents, we are our clients’ first line of defense against all sorts of risks. It’s our responsibility to inform them about every threat facing their business and encourage them to protect themselves. So why are so many businesses going without cyber insurance? My guess is most of us don’t know a lot about cybersecurity threats. But where some see this as a liability for our industry, I see it as a lucrative opportunity for Smart Choice® agents.

Cybersecurity Risks Facing Small Business  (Including Your Agency)

Over the last few years, every aspect of running a business has evolved to require an internet connection. We communicate through email, generate leads through our websites, and store sensitive client and business data in the cloud. As insurance agents, we collect names, dates of birth, Social Security numbers, and financial information for every client. How many of our own business clients do the same?

If we don’t take precautions to secure that data, we are liable for any harm that comes from it being stolen or held hostage. Cyber threats can come from many different sources, including lone-wolf hackers here in the United States or abroad, disgruntled employees, third-party service providers’ lax cyber security, and even our mobile devices. It’s an enormous risk few of our clients understand and few agents address in their conversations with new and current business.

Seeing Opportunity Where Others See Risk

That 75 percent of small businesses aren’t covered for cyber risks is worrisome, and from the consumer perspective, downright frightening. But it opens the door to a great deal of new business to independent insurance agents.

If we take the time educate ourselves on cybersecurity risks and the value of cyber insurance, we can become our clients’ most valuable cybersecurity resource. Our clients don’t know they are leaving themselves and their businesses exposed to such a burgeoning risk. It’s our job to educate them about cyber threats and show them how easy it is to protect their businesses against it.

Learn about the cyber insurance policies your carriers offer and develop a plan on how to cross-sell them to your current commercial insurance clients. Once you have your pitch down, start promoting cyber insurance in every conversation you have with potential commercial insurance clients. Become the local resource on cyber risk and offer solutions that empower businesses to protect their own data and the personal information of their customers.

As agents, we don’t just sell insurance policies. We help our clients manage risk. Cybersecurity threats will only continue to grow in frequency and sophistication. This gives us the valuable opportunity to help our clients mitigate that risk before it even appears on their digital doorsteps

What Cyber Insurance Covers

Cybersecurity threats are a new and evolving risk that requires an insurance product all its own. Cyber insurance policies cover liability and property losses that occur when a business is hit with a cyber attack.

Coverage may include:

• Business interruption from cyber attack
• Computer fraud
• Costs of credit monitoring, fines, and loss after a data breach
• Cyber extortion
• Data loss and destruction
• Funds transfer loss
• Liability from data breaches
• Liability from web content
• Notification costs in the event of a data breach

(Sources) ia Magazine, IRMI, Small Business Trends July 2016, Small Business Trends April 2016