Small businesses are just as vulnerable to cybercrime as multinational corporations. According to a report, there were about 847,376 reports of cyberattacks and suspicious activity in 2021. The average cost of a data breach worldwide in 2022 was over $4.35 million, an evident increase from the previous year when it stood at $4.24 million. The majority of small business owners are not aware of the security dangers that are awaiting them. They hardly ever emphasize safeguarding their companies from such crimes.
According to a 2021 CNBC survey, more than 56% of owners of small businesses weren’t concerned about falling victim to cyberattacks and crimes. Some business owners were of the opinion that they would be able to handle such attacks if they occurred and that their companies didn’t even qualify for such a breach.
Contrarily, small businesses are the best targets for these breaches because they are the easiest to penetrate and have the weakest security infrastructure in place.
Impact of Cybercrimes
Due to human errors and negligence, cybercrime has become more prevalent, but there are other ways as well in which cybercrime can transpire. Among them are denial of service attacks, malware, and phishing scams. These online crimes interfere with regular business operations, close accounts, and withdraw sizable sums of money, making a company bankrupt. Small businesses that are victims of such cybercrimes may sustain irreparable financial harm. It has been observed that some have had to close their doors over time because their recovery plans were inadequate.
Cybercrimes reduce brand value and erode stakeholders’ faith in owners’ and executives’ ability to run the company effectively. The effects are more severe than one would anticipate.
Here are some of the ways to remain protected from these crimes:
Training and Awareness
The best way to prevent these attacks is by educating the workforce about how they can occur and how to best avoid them.
Employ Top-Notch Software Security
In order to get first-level protection from these cybercrimes, businesses should invest in developing a software security architecture.
Use Encryption and Password Protection
By using end-to-end encryption and password protection for files, sensitive information can be protected.
Conduct Audits and Assessments
The effectiveness of the security systems in place should be regularly audited; for a thorough examination, a fictitious cybercrime can be performed.
Use Cloud Storage
One of the most effective ways to stop any data breach is to use cloud storage. All data being in the cloud prevents cybercrime because the majority of attacks target on-premises systems for critical information. Besides, cloud vendors and partners ensure that the cloud infrastructure is secure.
In addition to exercising caution when it comes to cybercrime, purchasing insurance is one of the plausible options. When it comes to defending your company against cybercrimes and attacks, cyber insurance coverage can be a wise investment. Let’s take a look at what this coverage is all about.
Cyber Insurance Coverage
By 2027, it is anticipated that the market for cybersecurity insurance will have grown at a CAGR of 19% and will be worth close to $29.2 billion. This demonstrates that companies are becoming aware of the value of purchasing cyber insurance. As mentioned above, small businesses are more likely to experience the adverse consequences of any breach, making it even more important for them to take the proper measures.
Companies are protected against cyberattacks by cyber insurance, which also pays for costs like fines and legal fees. Small businesses must secure their systems to prevent data breaches if they have sensitive data, such as customer information. A company can purchase a first-party cyber insurance policy if it is not connected to any other units or companies. On the other hand, a company needs third-party cyber insurance coverage if it is responsible for a customer’s or client’s online safety.
The following are covered by first-party cyber insurance: legal counsel, lost income, data recovery and replacement, extortion and fraud, fines, etc. Third-party cyber insurance includes coverage for the resolution of claims and disagreements, payment for violations of copyright or defamation laws, settlements, damages, etc.
Each type of cover required by each business model has a unique premium that depends on a number of different variables. The amount of protection needed depends on the business processes or risks involved. Based on this information, the premiums are decided. Depending on the level of protection needed, cyber security insurance can range in price from about $100 to several hundred dollars.
Depending on a number of factors, a cyber security insurance policy may be purchased separately or in conjunction with a business owner’s policy. The right insurance provider, who understands your business model, can help make these decisions.
Want to protect your business against cybercrimes? Get customized insurance quotes that suit your business model and give you 360-degree protection against such mishaps.