Operating a cannabis business within the United States can already be uncertain. Laws between states can vary substantially, and federal laws remain a major source of concern for the entire supply chain. Despite these challenges, the cannabis industry continues to grow in the United States, proving this industry remains resilient despite uncertainties and a shifting regulatory environment.
However, individual cannabis businesses still face their own problems, including the prevalence of cybercrime. With so many potential external forces creating business challenges and opportunities, keeping your operations protected from unexpected expenses is important. Cyber liability insurance is one way to minimize risk, and it's critically important for cannabis-related businesses.
Why Do You Need Cyber Liability Coverage?
Standard business insurance, typically called commercial liability insurance, protects your business from potential liabilities. These typically include physical injuries that occur on-site and damages caused by products, misrepresentation or labeling issues, and advertising. However, general insurance does not usually protect your business from damages resulting from cyber crimes.
Like other liability coverage policies, cyber liability coverage helps safeguard your company against legal expenses. While cyber fraud and other crimes can impact your business directly, they can also affect your customers, employees, other businesses, and even unrelated bystanders. If these individuals or organizations suffer monetary harm, they may attempt to seek a legal remedy from your company.
Data breaches are often the most common cause of liability issues related to cybercrime, but they're far from the only crime that can leave your company vulnerable to lawsuits. Even simple denial-of-service attacks may open your company up to legal issues by affecting access to services your clients rely on for income or other critical purposes.
Why Do Cannabis Industry Organizations Need Cyber Liability Insurance?
Cybercrime is the second-largest source of losses for cannabis-related companies. Since cybercriminals often target small businesses, and small businesses employ a majority of workers in the cannabis industry, it's no surprise that this category makes up such a large percentage of legal losses for cannabis companies.
However, other factors also make this industry a uniquely suitable target for cybercrime. With a constantly shifting regulatory landscape, many companies may not have the time or resources to implement ironclad cybersecurity techniques. Smaller businesses may also lack dedicated IT security teams and the expertise to train employees against IT threats.
These vulnerabilities leave many companies open to attack and, ultimately, to legal liabilities that can be even costlier than the attack itself. Purchasing cyber liability coverage for your company helps you mitigate these risks, allowing you to focus on growing your business for the future.
Contact a company like Millers Insurance Group to learn more.
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