Cyber security breaches, whether the result of cyber attack, internal or third-party data center error or simple carelessness, have never only been a problem or concern for the largest financial institutions or Fortune 500-sized companies with massive IT infrastructures. Small- and mid-sized businesses must also do all they can to protect the integrity of client and company data against a backdrop of tightened government regulations, growing personnel costs and budgetary concerns. While firewalls and other technologies can block many malicious trojans, worms and viruses, just a single security breach can wreak havoc on a business' reputation, bottom line, even its very existence.

Cyber liability insurance for businesses of all sizes has never been a luxury. Now, more than ever, it has become an absolute necessity, according to Michael Palotay, senior vice president, Underwriting at NAS Insurance Services, Inc., an Encino, Calif.-based liability provider. This is especially true in the healthcare and retail sectors.

"Healthcare providers, given the sensitive nature of patients' personal medical data and increased regulatory scrutiny, account for 70 percent of our cyber liability book, but for the past two to three years we have seen growing demand among client companies of all sizes across industries," Palotay said.