The Ultimate Guide to Cyber Insurance for Retail Companies

As retail companies continue to expand their digital footprint, the threat of cyberattacks looms larger than ever before. In fact, recent studies have shown that 24% of cyberattacks specifically target retailers, making it the most vulnerable industry to malicious online activity. With 34% of retailers citing cybersecurity worries as their primary hindrance in moving to e-commerce, it's clear that the fear of cyberattacks is well-founded.

To protect your business from the potentially devastating effects of a cyberattack, it's essential that you have the right insurance in place. Retail business cyber insurance is designed to provide coverage for costs associated with data breaches, cyber extortion, and other forms of online theft. It can also help cover the cost of any repairs or remediation needed after an attack.

We Have the Best Cyber Insurance Policies for Retail Stores and Businesses

At Brighton Financial and Insurance Services (BFIS), we understand the complexities of insurance for retail companies. Our policies provide retailers with access to a wide range of exceptional benefits, including:

• Comprehensive protection from a wide variety of cyber threats, including data breaches, ransomware attacks, and malware.
• Rapid response to any cybersecurity incidents that arise.
• Coverage for lost revenue due to an attack or breach.
• Assistance with crisis management and PR services in the event of an attack.
• Round-the-clock customer support and continuing education on the latest cybersecurity threats.

At BFIS, we strive to provide our clients with personalized service and tailored solutions that are tailored to their specific needs. With our team of experienced insurance professionals, you can trust that your business is in good hands. Contact us today to learn more about how cyber insurance from BFIS can help your retail business.

Common Cyber Attack Threats to US Retail Companies

The following are the most typical forms of cyber threats that retail businesses encounter, as well as the percentage of their frequency:

Credential phishing: 30%

This type of attack typically involves tricking employees into revealing their login information using fake emails or landing pages that closely resemble the company's actual login page. Once obtained, the attacker can use these credentials to gain access to sensitive data or even install malware on the company's network.

Malware: 22%

Malware refers to any software that is intentionally designed to harm computer systems, steal data, or gain unauthorized access. Malware infections can cause significant damage, ranging from the theft of personal information to the complete shutdown of a company's network.

Ransomware: 13%

Ransomware is a type of malware that encrypts files on a victim's system, making them inaccessible to the user. The attacker then demands payment in exchange for returning the files to their original state. Ransomware attacks can be incredibly devastating, often resulting in significant financial losses for the impacted companies.

Distributed denial-of-service (DDoS) attacks: 10%

Distributed denial-of-service (DDoS) attacks involve overwhelming a website or network with traffic, rendering it unusable to legitimate users. DDoS attacks can bring down entire websites or networks, leading to significant financial losses.

Other attack methods: 25%

This category includes various types of attacks such as SQL injection, cross-site scripting, and social engineering. These types of attacks can be challenging to detect and mitigate, and they often require significant effort to fully repair the damage caused.

Understanding Retail Store Cyber Insurance

Retail business cyber insurance, also known as retail cyber liability insurance, retail store cyber insurance, or retail cyber liability coverage, is a form of coverage that helps protect a business from the financial losses associated with data security breaches. This type of insurance provides reimbursement for costs such as legal fees, fines associated with privacy regulations, and damage to the company's reputation caused by a data breach. In addition, it covers any compensation required to be paid to individuals impacted by the breach.

Retail store cyber insurance is essential for any business that stores, processes or transmits personal or financial data. It can help reduce the financial impact caused by a data security incident and protect companies from suffering substantial losses.

Who Needs Retail Business Cyber Insurance?

Retail store cyber insurance is designed to protect businesses that own, manage, or lease retail stores. This type of coverage can be particularly beneficial for small- and medium-sized retailers who may not have the resources necessary to effectively mitigate the financial losses associated with a data security incident. Common groups that may require retail cyber insurance include:

• Grocery stores
• Clothing stores
• Pharmacies
• Department stores
• Home improvement stores
• Electronics retailers
• Bookstores
• Restaurants & Bars
• Sporting goods stores
• Auto parts stores
• Hardware stores
• Gift shops / Specialty retailers
• Drug stores
• Toy stores
• Pet supply stores.

Retail store cyber insurance can help protect businesses from financial losses associated with data security incidents and can provide peace of mind knowing that they have the coverage necessary to respond quickly in the event of a breach. 

Companies should carefully evaluate their individual needs and select an insurance policy that provides adequate protection for their particular type of retail store. With the right plan in place, retailers can rest assured that they are covered if a data incident occurs.

Types of Retail Business Cyber Insurance Coverage

There are two main types of retail store cyber insurance coverage available: first-party and third-party coverage.

First-Party Retail Business Insurance

First-party retail store cyber insurance covers the costs associated with responding to a data security incident. This includes expenses such as notifying customers or other affected individuals, providing credit monitoring services, and restoring lost data. It also covers any fines or legal fees incurred in the process of resolving the issue.

The following are some of the components that may be included in a first-party retail store cyber insurance policy:

• Notification Costs: Coverage for expenses related to notifying customers and other affected individuals of a data security incident.
• Credit Monitoring and Identity Theft Expense Reimbursement: Coverage for costs associated with providing credit monitoring services to customers whose data has been exposed or stolen.
• Data Restoration Costs: Coverage for expenses related to restoring lost or damaged data caused by a security incident.
• Public Relations Expenses: Coverage for costs associated with managing a company’s reputation following a data security incident.
• Regulatory and Legal Fees: Coverage for legal fees associated with defending against any lawsuits or investigations related to the security incident.
• Data Breach Costs: Coverage for expenses related to investigating, containing, and mitigating the effects of a data security incident.
• Business Interruption Costs: Coverage for losses incurred due to a business interruption caused by a security incident.
• Cyber Extortion Expenses: Coverage for expenses incurred in response to an extortion threat related to a security incident.
• Network Security and Privacy Liability: Coverage for third-party claims related to network or privacy liability issues.
• Cyber Terrorism Costs: Coverage for costs associated with management protecting against and responding to cyber terrorism attacks.

By having a first-party retail store cyber insurance policy, businesses can be prepared in the event of a data security incident and mitigate any losses incurred as a result. In addition to the coverages outlined above, a cyber insurance policy can also provide other services such as risk assessment and security consulting, breach response planning, legal counsel on privacy regulations enforcement, and more.

Third-Party Retail Store Cyber Insurance 

Third-party retail store cyber insurance covers claims from third parties, such as customers or suppliers, that result from a data security incident. The types of coverages included in a third-party cyber insurance policy typically include:

• Data Breach and Information Security Liability: Coverage for expenses related to third-party claims of unauthorized use, access, disclosure, or destruction of sensitive data.
• Payment Card Industry (PCI) Fines and Penalties: Coverage for losses incurred in the event of a breach resulting in PCI fines or penalties.
• Regulatory Defense and Penalties: Coverage for legal defense costs associated with regulatory violations stemming from a security breach, as well as any resulting penalties or fines.
• Online Media Liability: Coverage for libel, slander, copyright infringement and other online media-related claims resulting from a security incident.
• Network Security and Privacy Liability: Coverage for third-party claims related to network or privacy liability issues.

Third-party retail store cyber insurance is essential for any business handling confidential customer data, as it can help protect against the financial losses that may arise from a security incident.

How Much Does Retail Cyber Insurance Cost?

The cost of a retail cyber insurance policy depends on a variety of factors, including the type and amount of coverage needed as well as the size and complexity of the business. Generally, retail store cyber insurance policies start at around $500 per year for basic policies with limits up to $2 million, but more comprehensive policies with higher limits can cost up to several thousand dollars.

In addition, some insurers offer discounts for businesses that take proactive measures to protect their data, such as regularly updating security software and implementing employee training programs. It is important to shop around and compare rates from different providers in order to find the best coverage at a price that fits your budget.

Get a Retail Business Cyber Insurance Quote

Brighton Financial and Insurance Services (BFIS) offers comprehensive retail store cyber insurance policies tailored to the needs of your business. We understand that every company is unique, and our experienced team will work with you to create a policy that meets your specific requirements. Contact us today for a free, no-obligation quote.