In today’s ever growing digital age, businesses of all sizes are turning to technology for daily operations ranging from managing customer data to facilitating financial transactions. With this increased reliance on technology comes an equally growing risk: cyber threats. As cyber criminals grow more sophisticated, small businesses have become prime targets.
- According to the Small Business Administration (SBA), roughly 43 percent of cyberattacks are on small businesses, and only 14 percent of them are adequately prepared to defend themselves.
Unfortunately, many small businesses underestimate their vulnerability by believing they will not attract a hacker’s attention. This misconception can be a costly mistake, making cyber insurance a critical safeguard.
What is Cyber Insurance?
Cyber insurance is a specific insurance policy designed to mitigate the risk of financial fallout from cyberattacks and data breaches. It can cover a variety of expenses that arise from these incidents including data recovery, legal fees, and reputational damages. For small businesses, cyber insurance is a vital safety net. Even a minor breach can lead to significant financial losses, and without being properly insured, many small businesses will fold.
- Roughly 60 percent of small businesses close their business operations within six months after a cyberattack.
Cyber criminals see smaller businesses as easy targets because they tend to have fewer cyber security defense mechanisms in place. Common attacks range from phishing schemes, ransomware, and data breaches.
- 3.4 billion phishing emails are sent daily, 32 percent of which are from Russian IP addresses.
- The average ransom payment in 2024 is $2 million, up 500 percent compared to 2023 ($400k).
- National Public Data, a company that resells collected personal information for background checks confirmed a breach leaked more than 3 billion records/data pieces as of April 2024.
- Proper employee training can reduce the risk of a company’s cyber breach attack by up to 70 percent.
Steps to Protect Your Business from Cyberattacks
With those statistics in mind, every business regardless of size should be taking appropriate measures to protect themselves from cyber criminals and incidents. Below are actionable steps businesses can take to protect themselves from cyber losses:
-Risk Assessment: Conduct a thorough risk assessment to identify vulnerabilities and prioritize areas needing improvement.
-Employee Training: Regularly train employees on cybersecurity best practices and incident response procedures.
-Cyber Incident Response Plan: Develop and regularly update an incident response plan to ensure swift action in the event of a breach.
-Vendor Management: Ensure that third-party vendors comply with cyber security standards to reduce risks.
In the evolving world of cyber threats, small businesses are no longer immune. Cyber insurance offers critical protection, helping small businesses recover from the devastating effects of cyberattacks. As a business owner, the question is not whether you can afford cyber insurance, but whether you can afford to be without it. If you’re a small business owner looking to protect your company from the ever-increasing dangers of cybercrime, now is the time to invest in a comprehensive cyber insurance policy. Don’t wait until it’s too late. Contact us at MPB Insurance to consult about your cyber insurance options today.
insurance@mpbinsurance.com
Cyber Facts resources
- 3.4 billion phishing emails are sent daily, 32% are from Russia IP addresses
- Spam e-mail: countries of origin 2023 | Statista
- The average ransom payment in 2024 is $2million, up 500% compared to 2023 ($400k).
- Ransomware Payments Increase 500% In the Last Year, Finds Sophos State of Ransomware Report | Sophos
- 43% of attacks are against small businesses, only 14% are prepared to defend themselves.
- Cyber Safety Tips for Small Business Owners | U.S. Small Business Administration (sba.gov)
- Proper employee training can reduce the risk of a company’s cyber breach attack by up to 70%
- Study: Employee Training Can Reduce Cyber Security Risks | Industrial Distribution (inddist.com)
- 60% of small businesses close within 6 months of being hacked
- 60 Percent of Small Companies Close Within 6 Months of Being Hacked (cybersecurityventures.com)
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