Introduction

If you own a small business and think that you’re too small a fish for cyber attackers to even consider targeting you, think again. It’s this mindset that cyber attackers leverage to deploy attacks that one would never expect. It also makes your small business vulnerable, but don’t just take our word for it. A study by Cisco revealed that a staggering 43% of cyberattacks target small businesses, and that’s not all, these businesses end up shelling out $55,000 on average to mitigate the damages and fully bounce back from just one attack. Besides this, even if you manage to rebuild your operations and start from scratch, your reputation as a brand goes for a toss as regaining the trust of your customers is a lot harder and takes a significant chunk of time and resources.

Causes of cyber breaches:

Lack of understanding of your own data

For a small business owner, it’s very easy to get completely consumed with generating revenue, taking care of your clients, and being obsessed with the bottom line. This is often the main reason why SMBs lack visibility of the sheer volume of critical data they manage and are responsible for keeping safe on a daily basis. A study by CNBC in 2022 uncovered the fact that most SMBs do not think of cyber threats as dangerous, and they often feel like even if they were attacked, they would be able to combat it easily, but this is far from the case because data says otherwise.

Lack of training and awareness

If employees are not aware of the risks, they can not be expected to take the required measures needed to keep data safe. The proof of this lies in IBM’s study, “Cost Of A Data Breach” which revealed that 21% of breaches were caused accidently or through negligence by employees or vendors and contractors. To fight such breaches, SMBs must have training programs in place that guide and train people on how to be responsible with client data. It also helps to have a good cyber insurance plan to combat damage.

Things to keep in mind while choosing cyber insurance for your small business:

Do your due diligence

Start by evaluating your commercial insurance and be meticulous in studying the terms of your current policy if any, and check if cyber insurance is covered in your plan and to what extent.

Evaluate your data & understand potential exposure risk

It is very important for small businesses to understand their own data, this helps in anticipating attacks by isolating sensitive areas. It is important to see what is extra sensitive and what needs an added layer of protection. Understanding your risks and the financial implications of potential threats will help you make an informed decision on the kind of cyber insurance you need.

Benefits of cyber insurance

Combats losses due to downtime

Any business dealing with attacks that are highly destructive in nature such as malware or ransomware can lead to unforeseen downtime, a good cyber insurance policy will compensate for these losses so you’re not left stranded.

Covering regulatory fines

Small businesses that undergo a data breach are usually slammed with regulatory fines and defense costs, especially if the data is highly sensitive and critical, a good policy will also cover such costs and fines which lightens your load so you can focus on the bigger picture – regaining customer confidence and trust.

Ransom compensation recovery

If you are unlucky enough to be hit by ransomware, businesses may have to choose between paying a ransom or protecting their data, in this case, data recovery in this case is the better option and a good policy will cover this cost.

Hardware damages

For many businesses, repairing or replacing damaged machines can leave you drowning in debt, however, if you have a good cover, your policy will take care of replacing damaged machines for you.

Conclusion

Due to a lack of awareness and a casual attitude towards cyber threats, SMBs are the easiest target simply because they always have their guard down. It is time for small businesses to realize and acknowledge the threats of cyberattacks. If you are a small business owner looking to get good cyber insurance to protect your data and assets, we would be happy to help.