Although most cyberattacks you see in the media target big businesses, small businesses are the principal target of hackers – not huge conglomerates.
Cyberattacks are a serious problem and every small business owner needs to take them seriously, particularly since the problem continues to escalate.
How Vulnerable are Small Businesses?
The 2017 State of SMB Cyber report shows that small businesses are very vulnerable. 61% of U.S small business experienced a cyberattack last year, up 6% from the previous year. Of these, 54% resulted in data breach.
The reasons are simple – most small businesses don’t have the training or resources to protect against these cyber attacks. As a result, they’re more vulnerable to malware, ransomware, e-commerce attacks, and phishing.
Symantec reports that vulnerabilities have doubled in recent years. While the primary target is usually money, espionage, ideologies, grudges, and supposed “fun” also motivate some hackers.
According to Verizon’s 2017 Data Breach Investigations Report, personal information remains the primary target. Criminals now tap into data through more avenues, such as mobile, and phishing is the most commonly used tactic. Since small businesses often rely on smartphones, laptops, and tablets, they’re at greater risk.
Most states legally require businesses to contact customers if a data breach compromises their personal information. Regardless of the legalities, it is an absolute must if you want to save your business and brand image.
Recovering from a cyberattack often includes hiring staff, a lawyer, and a public relations firm. Additionally, you’ll need to revamp your practices and train employees and contractors so it does not occur again.
Would You Survive?
A 2017 study estimates the cost per compromised record is now $225, an all-time high. This includes lost revenues, required new technologies, legal fees, and post-attack expenses for things such as an investigation, a financial audit, and communications.
A 2014 First Data Market report estimates an average cost of $36k for a small business, but is probably higher today. Additionally, 31% of customers terminate their relationship with a company after a breach.
Cyber Liability Insurance
Many small business owners consider cyber liability insurance a wise precaution to augment their technology and best practices. A standard business insurance policy does not typically include it, but it’s affordable and becoming a necessity.
This coverage can cover losses, the costs of claims for liability, and hardware and software-related issues. It also compensates you for the costs associated with customer notifications, credit monitoring, fines, and more. It may also cover missing funds transfers, data destruction, business interruption, fraud, and extortion. According to Cisco, ransomware continues to grow at 350% annually.
Small businesses face huge online risks, and data is often an important asset. Fortunately, cyber liability insurance is there for you when a cyberattack occurs. It can ensure business continuity, provide financial security during a difficult time, and provide you with peace of mind. It’s a reasonable precaution in today’s internet-driven business environment.