Your SaaS company as a cloud computing firm is sure to have PII and like I stated earlier on this can be the target of hackers thereby leading to a cyber breach. These cyber breaches can take place in numerous ways.
One of the ways a cyber breach can occur is when a phishing site upon access to the PII stored on your database sends emails to your users deceiving them into believing the email comes from your SaaS company. When your users click on the links attached to such emails, these hackers gain access to the user’s personal files.
Statistics from the Identity Theft Resource Center asserts that 571 breaches were carried out on businesses in all sectors of the company which led to the exposure of 415 million employee and customer records in 2018 alone.
Big corporations survived these breaches but a large number of startups were left vulnerable and closure seemed the easy way out. This is why having cyber liability insurance must not be overlooked.
Here are a few reasons why cyber liability insurance is of great importance for your SaaS startup:
1. Payment For Defense Costs
After a data breach, you and your SaaS startup will surely come under fire and cross-examination by all who fell victim of the breach. Since your SaaS company was the trojan horse the hackers used to attack their personal details you can be sure to have angry users calling and waiting at your reception.
Even though it was obviously a malicious attack on your company, you will have lawsuits coming at you. The cyber liability insurance coverage pays for the defense costs these lawsuits will incur.
Rather than use company funds to save your company should lawsuits be fired at you, your cyber liability insurance takes care of the cost and you need not worry much.
2. Coverage For Forensic Investigation
A forensic investigation would be carried out after a cyber attack to determine the source of the attack, what loopholes gave the hackers access to your database, and the culprits who carried out the malicious attacks.
The cost of a forensic investigation is covered by the cyber liability insurance.
3. Coverage For Business Interruption
Following a data breach or cyber attack, your SaaS company may experience slow operations or may need to shut down for a while in order to recover from the impact of the breach. Also, your systems may be locked up after a breach.
These interruptions to the operations of your business may cause you to lose some incentives but with cyber liability insurance, you are covered even amidst severe business interruptions.
4. Customer Notification and Monitoring
Your cyber liability insurance also covers the cost of sending notifications to your customers while also providing credit monitoring for them. It is important to send notifications to your customers after you experience a cyber breach.
5. Marketing and Public Relations Response
A marketing and public relations response is a quintessential step to take when your SaaS startup suffers a data or cyber breach. This response is important to protect the reputation of your company in the general market-view.
The cost of carrying out a marketing and public relations response is covered by a cyber liability insurance.
6. Extortion Money
Sounds new, right?
Well, extortion money is a form of ransom used to salvage your business from the hands of a hacker who notifies you before carrying out an attack.
Sometimes, hackers may contact you with proofs they can cause a breach in your database and may require you pay an amount to appease them. This amount paid is called extortion money, a bail for your business. It is paid by your cyber liability insurance.
7. Fines By Regulatory Bodies
Your SaaS company may go against some laid down operational policies and guidelines and you may be mandated to pay some fine. These fines paid to regulatory bodies are covered by your cyber liability insurance.
8. Media Liability Claims
You may be the victim of copyright infringement, slander, libel or any other media claims as you run your SaaS company. With cyber liability insurance you can attend to whatever media liability claims that may arise.
A cyber breach may damage your company’s collection of software and possibly hardware. The cost of repairing these damaged software and hardware are covered by your cyber insurance policy.