Small businesses are at the receiving end of about 46% of all cyberattacks. Their protection is limited and sometimes non-existent, making them easy targets. The lack of technical skills and domain understanding among owners also contributes to this.
What can small businesses do? Well, the right insurance and knowledge can help.
Possible threats small businesses face
- Ransomware attacks
According to reports, around 47% of businesses in the US face ransomware attacks. As the name suggests, ransomware is a kind of attack where an organization is not able to access its own data until a sum decided by the attackers is paid. Generally, these types of attacks happen through malicious websites, emails, etc. Businesses can lose their data, suffer reputational damage, and face legal issues.
- Hacking
System hacking has been a common phenomenon among individuals and companies. Hackers enter systems to steal data or sensitive information by using vulnerabilities in outdated software or easy-to-guess passwords. Once the hackers are in a system, they can download malicious software or take access to systems without the individual or organization knowing. It can jeopardize privacy and leak important information.
- Denial of service attack
In an interview, Brillies’ founder Kaila Uli describes how a DDoS attack—which is essentially an excessive amount of bot traffic that overwhelms the server—caused her online store to go offline. She did not have any sales for a full two weeks, which was extremely unusual for her company. According to her, she didn’t feel threatened because her business was super small and “shouldn’t have attracted attention”. Other small business owners also do not take such attacks seriously until they have significant financial or legal issues to contend with.
- Threats via third-party software, employees, or vendors
Someone on the network interferes with the operations in this kind of cyberattack. This could be a third-party vendor who is aware of sensitive information, a former or current employee with access to it, or software that someone uses in the organization to automate/ do a task. Such leaks are extremely risky since they may result in the sale of confidential information or contacts to a rival, which could cause a severe loss of reputation and business. Threats may also arise from software that has been compromised due to low security, which could have an indirect negative effect on the user.
How to protect your business from attacks in the digital age
- Encryption and data security
The simplest and most reliable defense against cyberattacks is encryption. Businesses can safeguard sensitive information for their operations, as well as data that is in transit or at rest, by using the appropriate encryption tools and keys. putting in encryption keys, protecting the entire hard drive with an encryption program, or using a virtual private network (VPN).
- Multi-layer security and touchpoints
This is one of the most crucial and effective ways to protect a small business from cyberattacks. Multi-layer security means using multiple security checks, be it VPN, firewalls, detection systems, antivirus/ anti-malware software, etc. These multiple touchpoints in security allow small businesses to be saved from cyberattacks because if one layer of security is compromised, the other layer can save the day.
- Data backup and recovery
Data is a sensitive currency in the modern world. To safeguard the company from the ill effects of a cyber-attack, data backup, safety, and recovery must be given top priority. Businesses can protect their data by identifying critical data, installing data backups, selecting the best backup configuration for their needs, and guaranteeing data security. For optimal outcomes, these database management or data backup systems need to be routinely observed.
In addition, companies can spend money on staff awareness and training initiatives to stop these kinds of attacks. It is imperative to conduct routine site audits and promptly investigate any questionable activities.
The role of insurance
Our very own Chris Gonzalez recently wrote on LinkedIn about how only 1 in 6 small businesses invest in cyber insurance and how, in 2023, 4 out of 10 small businesses faced at least one type of cyberattack. This leaves a lot of room for discussing how important cyber insurance is and how vastly it can protect a small business.
Small business owners typically handle operations alone or with the help of a small team. This makes it difficult or impossible to routinely assess the condition of their paywalls or websites. However, there are several ways in which investing in cyber insurance can benefit them tremendously.
Cyber insurance is a policy that helps small business owners address the financial implications and legal callouts in case of a cyberattack. This can include all types of cyberattacks mentioned above and more, which are even unheard of. Any type of business model can invest in cyber insurance, but the requirements and size of the business operations typically determine the cost of the insurance. For example, a small business can get a cyber insurance policy starting at as low as $500, and depending on the coverage limits, the price can go up. There is a lot of room for customization when it comes to cyber insurance, thus making it easy for small businesses to invest in a policy as per their requirements.
An insurance policy of this kind can help in recovering the costs due to downtime (business loss), paying for legal hearings and compensation, paying for cyber extortion, or investing in data recovery.
Small businesses, even if they are individual ventures, require some level of cyber security. Those who do not want to invest in heavy technology can simply invest in cyber insurance to protect their data, operations, and assets from attackers. If you are a small business and are looking to get customized cyber insurance specifically designed for your small business, then we can be of help. We offer portfolio analysis and customized policies that are ideal for your business. Get in touch with us to know more.