Why Small Businesses Need Cyber Insurance

What types of small businesses need cyber insurance? 

The short answer is all of them. From phishing scams to high profile ransomware attacks, cyber crime is a global concern – and every business with a digital footprint should be concerned about it. While SMEs are smaller than large enterprises, they still hold sensitive customer information, vendor payment information and passwords on their computer systems or in the cloud – all the things cyber criminals are after.  

That’s why all small businesses require comprehensive cyber insurance for business to help protect them, as well as ensure that the right cyber security solutions are in place that will help predict and prevent cyber criminals from avoiding attacks in the first place.

What are the common cyber threats that SMEs face? 

Digital threats to small businesses are numerous and evolving. A new survey by the Canadian Federation of Independent Business (CFIB) found that nearly half of small businesses experienced a random cyberattack in 2022, while 27% experienced a targeted attack.  

Here’s some of the most common types of cyber threats that small businesses face: 

Phishing Attacks

Phishing usually occurs via email when an attacker pretends to be a trusted contact to trick the end user into clicking a link that can download a malicious file or grant the attacker access to sensitive information and credentials. As a result of these phishing attacks, cybercriminals can gain access to business email accounts, and use them to fradulently request payments from their customers and employees.  

SMSishing Attacks

The term “Smishing” is a mash-up of phishing and SMS (short message service). It’s basically phishing that uses text messages to target victims. Fake text messages are sent with an urgent call to action (usually requesting a debt or payment) and a link that either downloads malware or tricks the receiver into sharing sensitive information. As consumers and businesses spend more time on their devices, smishing is on the rise. In fact, Proofpoint’s 2022 State of the Phish report found that 74% of organizations in the US experienced smishing attacks in 2021. 

Malware Attacks 

Malware is a term used to describe malicious code that hackers can use to infiltrate a computer network, steal sensitive data, and cause system failures. Usually transmitted through fake website downloads or spam emails, the fallout of a malware can be irreversible, leading to a loss of customer trust and revenue.  

Ransomware 

A ransomware attack involves hackers stealing data and encrypting it so the company can’t access it. A ransom is then demanded to either unlock the data or to prevent the hackers from releasing or selling sensitive information on the dark web. In 2021, the Cybersecurity and Infrastructure Security Agency (CISA) reported a trend toward hackers redirecting ransomware efforts away from high-profile corporations and critical infrastructure to easier to-access SMEs.  

Insider Threats

According to a 2021 report by the European Union Agency for Cybersecurity (ENISA), the average annual cost of cybersecurity incidents caused by insiders within an organization hit €11.45 million. Insider threats to cybersecurity come from employees, contractors, or other authorized users who have access to the company’s systems and data.  

These threats can take various forms, such as employees intentionally stealing or selling sensitive data, accidental exposure of confidential information, or employees falling victim to phishing attacks and inadvertently giving hackers access to the company’s systems. Small businesses are particularly vulnerable to insider threats because of limited resources and difficulty monitoring employee behavior.

What are the consequences of a cyber attack without cyber insurance? 

The consequences of a cyber attack can be severe for both your business and your customers as it can result in the loss of sensitive data, business interruption, legal fees and lawsuits, as well as long-term reputational damage. Small businesses arguably have the most to lose in a cyber attack as 60% don’t recover after one. For example, a recent report from IBM revealed that businesses with less than 500 employees lose on average $2.5 million per attack.

What are the benefits of cyber insurance for small businesses?  

All-in-one cyber insurance and protection plans for businesses is the best way to protect against the losses associated with a cyber attack, and to help them on the path to recovery.  

A cyber plan that covers a wide range of cyber threats, including data breaches, cyber extortion and business interruption is recommended. Plus offering services and access to experienced vendors to advise on legal issues, data restoration and public relations should be included to ensure your business can become operational as quickly as possible.

That’s why Cyberboxx™ Business offers the following coverage and services: 

1. 1. Breach Response Services: Hackers don’t just work a 9-5. In fact, they target SMEs on weekends, late at night and during holidays to maximize the opportunity. The first hours of an attack and how your business initially responds can make all the difference. 
   2. vCISO Services: Add a Virtual Chief Information Security Officer to your in-house security team at a fraction of the cost. They’ll help you identify any security shortfalls and improve your overall security posture. 
   3. Employee Cyber Awareness Training: Employees are your first line of defence against a cyber attack. With regular employee awareness training and phishing simulations, you can strengthen your SME’s human firewall and better protect your organization from cyber criminals trying to breach your networks. 
   4. Data Backup & Security: Our professional data backup, protection and recovery services shields your servers, data and devices. If your business is hit by a major incident, you can focus on the priorities while our team recovers your data and protects your identity. 
   5. Managed Firewall & Monitoring Services: We provide professional-grade security firewall and monitoring services to protect the perimeter of your networks and devices.