Do Small Businesses Need Cyber Liability Insurance?
A common misconception is that cyber criminals only target large businesses and corporations, but that’s not the case. Sure, the cyber attacks we see in the news feature large businesses like Target, Equifax, and most recently – Uber. But, for each of these data breaches on large businesses, there is a cyber attack on a small business that is endangering the small businesses’ ability to operate and serve its customers.
Small businesses are just as enticing, if not more so, than large businesses. According to the 2021 Verizon Data Breach Investigation Report (DBIR), it was found that small organizations experienced 263 breaches in 2020, compared to 307 breaches for large organizations. Large businesses typically have the capacity to allocate more resources toward information technology, while small businesses have limited resources and likely don’t have a dedicated IT professional. Because of this, small businesses can often be seen as “low-hanging fruit” to cyber criminals.
Verizon’s 2022 DBIR found that Ransomware is the top cyber threat that small businesses face. Cyber criminals use ransomware to encrypt your data so you can’t access it and will then demand payment in exchange for unencrypting your data. This can lead to some serious downtime that has put small organizations out of business.
The use of stolen credentials comes in at a very close second to ransomware. In addition to breaches via web applications, email, and carelessness (error), Verizon found that desktop sharing software is also a common source of breaches. When the pandemic hit, many businesses scrambled to find a way to continue their operations and ensure their employees were working in a safe environment. A common solution was to allow employees to remote into their workstations from home. If it is simple enough for an employee to access a workstation remotely by entering a username and password, it would be just as simple for a cyber criminal to do the same.
The main driving factor for cyber criminals is financial gain and no business is too small to be considered a financial opportunity. For example, a local Indiana grocery store suffered a ransomware attack to their point-of-sale system. The virus caused the majority of their stores to close temporarily, and the chain lost millions of dollars in Thanksgiving sales. The virus was able to enter their system from a simple email opened by an employee. You can read more details about this example from Newsbug.
There are some great methods out there to help prevent cyber attacks, but cyber insurance can be a great asset for when you actually fall victim to a cyber attack. The coverages included in a cyber insurance policy can vary from company to company, but they can provide protection for losses from breaches, business interruption from a security breach, and liability for breaches to a third party’s data.
Reach out to your agent today to ask how you can obtain cyber insurance for your business!