Insurer launches cyber insurance for small businesses

Insurer launches cyber insurance for small businesses

Summary: Security attacks targeted at 'main street' companies have prompted Farmers Insurance Group to add cyber-liability coverage to its policies for this segment.

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TOPICS: SMBs, Security
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A few weeks ago, I wrote a feature about corporate insurance policies that protect businesses in the event of a major data breach. Very few companies have this sort of coverage, in part because of the expense and in part because most responses to security problems tend to be reactive - even among the biggest of big companies.

That hasn't stopped Famers Insurance Group from developing a new line of Cyber Liability and Data Security coverage that is specifically targeted at "main street businesses." As best I can tell from the information I've received and read about, this currently applies to companies in California and Texas.

What's more, the coverage will be provided automatically for certain policies with a modified premium of less than $50,000 - effective Jan. 1, 2013.

The new measures cover privacy breach response services, including customer notification, computer forensics and legal assistance. Policy holders also receive security risk-management services through FarmersCyber.com.

Data released by Symantec in late 2011 found that roughly 40 percent of all targeted cyber-attacks centered on small and midsize companies, compared with 28 percent focused on big enterprises. There are lots of reasons for that, including the fact that SMBs aren't usually as prepared for these sorts of assaults.  

Topics: SMBs, Security

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2 comments
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  • Better to put money into shoring up one's defenses

    Insurance will be little consolation to employees and customers that are adversely impacted by data breaches.
    Rabid Howler Monkey
  • Need More Than Defense

    Data security insurance (cyberliability) is part of a well rounded security/privacy risk management approach. Money should be spent not only on preventative measures, but also defensive measures and risk transference. No matter how good your defenses are, there are issues that can still occur. Good insurance will help employees and customers with their damages too.
    ebublitz