Small businesses are increasingly becoming targets of cyber attacks, with 46% of such attacks affecting companies with less than 1,000 employees, according to Verizon’s Data Breach Investigations Report. 60% of these businesses close within 6 months of an attack, making cyber threats a high-stakes risk. Despite the high risk, many small businesses fail to protect themselves with cyber insurance.
Small businesses are vulnerable to cyber threats due to poor cybersecurity compared to larger companies. Attackers often target these businesses for monetary gain or access to data, as small businesses are more likely to pay ransom and have access to larger partners and vendors.
Cyber insurance is becoming a necessary protection for businesses of all sizes as next-gen attacks using AI technologies become more sophisticated. Cyber liability insurance protects a business from the high costs of recovering from a data breach or malware attack, covering ransom payments, technical resources, communication with stakeholders, lost productivity, and reputational damage. However, insurance is not a complete solution and may only help in recovery after an attack, not prevent it.
Insurance companies are starting to require basic cyber hygiene and may ask for proof of controls being met. A complete solution for businesses includes cyber insurance, cybersecurity protection, and employee training.
Small businesses can establish a cybersecurity baseline by following a three-step plan:
- Assess their cybersecurity posture by analyzing hardware, software, and online applications for security vulnerabilities.
- Create a basic cyber hygiene policy, including password policies, software updates, hardware updates, management of new installs, limiting users, data backup, and following a cybersecurity framework.
- Shop around for the best cyber insurance policy, looking for valuable benefits such as cyber investigators and legal aid.
Cybersecurity is crucial for every business, and cyber liability insurance is becoming an important part of protecting companies from the consequences of a cyber attack.