Cyber breaches are constantly in the news… and our news feeds. Security breaches experienced by global companies like Equifax, Target, and Yahoo have exposed the increasing risks of internet-based attacks.
For a small business owner, it can be easy to dismiss these occurrences as a threat that only looms over larger companies. But small businesses, beware:
You’re at greater risk of cyber attacks then you may have thought.
Here’s why it’s important to take cyber threats seriously.
Why Small Businesses Should Care about Cyber Threats
According to a study by Poneman Institute, an independent research firm that focuses on information security policy, privacy and data protection, half of all small and medium-sized businesses suffered a security breach in the previous 12 months.
Attacks against these businesses tend to fall into one of two categories:
- Social engineering, or phishing: the fraudulent practice of sending emails purporting to be from reputable companies in order to induce individuals to reveal personal information, such as passwords and credit card numbers.
- Web-based attacks: browser-based threats that include a range of malicious software programs that are designed to infect victims' computers.
The results of a cyber attack can be fatal for a small business; approximately 60 percent of small businesses that fall victim to a cyber attack will fail.
What Types of Cyber Risks do Small Businesses Face?
A small business is often under the illusion that the information they store and have access to is not worth the attention of hackers.
In reality, the opposite is true.
You collect sensitive information, such as credit card data, social security numbers, credit card information, customer names, addresses, and more on a daily basis.
Not only do small businesses possess hack-worthy information, they also tend to overestimate the amount of cyber security measure in place. This vulnerability makes small businesses an ideal target for cyber crime.
Some common examples of data breaches and cyber attacks include the following:
- An unsuspecting employee clicks and opens an email which then unleashes a disastrous virus. It not only spreads to the rest of your employees but also infects their contacts list which includes client email addresses.
- A hacker is able to scale the security protections you do have in place and steals the data contained in your files. This can often happen months -- or even years -- before you become aware of it.
- A former employee leaves your business on unhappy terms. Because their passwords were not changed, they are able to access your system, files and data from another location and wreak havoc.
- Your company's website is compromised by a virus. You're forced to hire someone who is able to redo the website and implement a new, more stringent security protocol. In the meantime, your website is inaccessible with profits and productivity suffering.
- Many of your employees access company information on mobile devices. An employee loses their device or leaves it unattended. Because it was not securely password protected, it's possible that sensitive information could be compromised.
- An employee’s company-provided laptop is stolen from their vehicle or home. The sensitive information inside is now up for grabs.
- A POS hack at a retail establishment tracks credit card numbers, expiration dates, and internal verification codes processed through a point-of-sale device.
How Cyber Liability Insurance Works to Protect Small Business
If any of the above-named scenarios leaves you wondering what you would do if one happened to you, it’s time to consider cyber liability protection for your business.
Cyber liability insurance is similar to other types of liability insurance for businesses: it can be used to provide cash to keep your business operations in place while you recover from an incident.
However, as a specialized insurance, cyber liability insurance goes beyond the coverage of a standard business liability policy.
It provides coverage against the first- and third-party risks that are an inherent part of doing business online. As a modern-day business owner, there’s a good possibility that you use some type of hardware or software to conduct your business operations.
Cyber liability generally covers risks such as:
- Loss or corruption of data
- Business interruption
- Identity theft
- Cyber extortion
- Reputation recovery
Having cyber liability insurance in place provides your business with funding for costs associated with recovering from a cyber attack as well as notifying those affected by the breach.
According to the 2017 Cost of Data Breach Study, conducted by Poneman Institute, a data breach involving less than 10,000 records cost the company an average of $5 million.
It makes sense to obtain cyber liability insurance now to safeguard your business. In today’s technologically advanced world, the risk of your becoming a victim of a cyber crime gets higher every day. Protect your business with cyber liability insurance, and you’ll be ready to recover if (or when) it happens to you.