Years ago, hackers mostly targeted larger companies and consumers. Today, however, businesses of all sizes face significant cyber exposure. Attackers have taken notice of companies with limited IT departments, outdated systems, and poor security measures. A cyber attack can disrupt operations, compromise customer data, and cause long-lasting financial and reputational harm to your business.
At Bowthorpe & Associates Insurance Producers, we encourage businesses to think of cybersecurity as part of their daily operations. By learning about current cyber risk trends, business owners can protect their companies with the right recovery plans and cyber liability coverage.
Why Small Businesses are Targeted
It’s a common misconception that small businesses don’t get attacked because they’re too small. In many ways, smaller companies make attractive targets to cybercriminals. Companies that use cloud-based systems, remote access, online payments, or store customer data provide several opportunities for attackers to try and access your network.
Attackers use bots and scripts that scan for vulnerable systems around the clock. From there, attackers can steal financial records, encrypt your data with ransomware, or use your business network to access your larger vendors. Even if your business is down for a couple of days, you could lose the ability to send invoices, pay your employees, and reach your customers.
Ransomware Attacks Are on the Rise
Ransomware attacks affect every industry vertical, and small businesses are often hit the hardest. These attacks encrypt your files and demand payment in order to give you access back to your system. Newer ransomware attacks may steal your data before locking you out to threaten exposure.
However, the costs associated with recovery go beyond the ransom price. You could lose operational income, spend money on data forensics and recovery, pay legal fees, give notification credits to customers, and damage your brand reputation. Many businesses that haven’t performed regular backups or created a response plan are unable to recover.
Cybercriminals are large-scale enterprises now. This means that cyber attacks, like ransomware, are more organized than they have been in years past.
Phishing Attacks Continue to Evolve
Businesses fall for phishing scams more than any other cyber attack. This is because phishing attacks are focused on manipulating people, rather than machines. Emails can look like they’re from your vendors, company executives, payroll providers, or banks.
Scammers may include fake invoices, login screens, or links that will harvest your login information. These attacks are becoming harder to detect as they often use personal information about employees to make the emails seem legitimate. By the time your employees know that a system has been breached, it may be too late.
One compromised email account can allow an attacker access to almost every account in your system. By training employees on the dangers of phishing attacks and implementing multi-factor authentication, you can reduce your risk of falling for one of these scams.
Remote Work Leaves Systems Vulnerable
Remote and hybrid employees are creating cybersecurity challenges for businesses. Working from home means that employees are using networks, computers, and public WIFI not secured by your business.
If attackers discover weak passwords or outdated software, they can use remote access software to enter your network undetected. Businesses used to be able to secure their network by locking down the office IT system. Cybersecurity solutions now have to focus on securing people, devices, and programs no matter where they are located.
You can limit your cybersecurity exposure by using access controls, endpoint protection, and secure connections for remote employees.
Third-Party Risk and Supply Chain Attacks
More businesses than ever outsource third-party vendors for bookkeeping, payment gateways, cloud hosting, software, and IT support. While this can improve business operations, it also increases your cyber exposure.
If one of your vendors is attacked, your business can be directly affected. Cybercriminals have figured out ways to infiltrate vendor software updates, steal vendor login information, and use cloud platforms to reach customer networks indirectly. A lot of businesses don’t realize these attacks are occurring until it’s too late.
Oversight of vendors has become crucial to every cybersecurity plan. By evaluating third-party security procedures and limiting vendor access to your network, you can help prevent attacks.
Cost of Cybercrime
When cyber crime affects your business, you could face serious financial repercussions. Cyber attacks can cause your business to endure months of lost income, third-party notifications, forensic investigations, and public relations damages. Your brand reputation can be harmed which could cause you to lose customers and hinder future sales.
A lot of business owners don’t realize how quickly costs can add up. After a cyber attack, you may need to pay for: systems restoration, legal fees, public relations services, vendor notifications, and even compliance fines. Businesses that experience repeated attacks may pay higher insurance costs or struggle to find cyber liability coverage in the future.
How Cyber Insurance Can Help
Cyber liability insurance can cover your business for a variety of expenses associated with cybercrime. These policies can help you with ransomware recovery, business interruptions, data breach responses, and more. Most cyber insurance providers now require you to have certain cybersecurity controls in place.
Cyber insurance policies often expect you to have multi-factor authentication, employee training programs, secure backups, and endpoint protection.
Cyber insurance is not a replacement for good cybersecurity habits but should be used to support your security efforts.
Improving Your Cybersecurity
There are steps you can take to limit your risk of falling victim to a cyber attack. Some of the best ways to protect your business start with your employees. Employee awareness training is crucial because cyber attacks will often start with someone unknowingly clicking a bad link. You should also maintain software updates, secure backups, password security, and incident response plans.
Cybersecurity isn’t a one-time solution. As cyber threats evolve, you should consistently be reviewing your systems, policies, and operational risks. Businesses that take the necessary precautions to secure their data will be better equipped to prevent cyber attacks and recover if one does occur.
Final Takeaways
Cybersecurity threats targeting small businesses are growing more sophisticated and costly. Ransomware, phishing, remote work, and third-party vulnerabilities are just some of the ways businesses are attacked every day. Business owners who aren’t prepared to secure their data can face lost income, customer trust, and damage to their reputation.
Small businesses can protect their companies by enforcing strong cybersecurity practices and investing in the right cyber liability insurance policy.
At Bowthorpe & Associates Insurance Producers, we work with businesses to help them understand cyber exposures and build insurance solutions that give them peace of mind.
Frequently Asked Questions
Q: Why do cybercriminals target small businesses?
A: Small businesses are targeted because they often lack the cybersecurity resources that larger companies have. By going after smaller companies with weak passwords, missing software updates, and untrained employees, attacks are more likely to be successful.
Q: What type of cyber threat do most businesses face?
A: Phishing attacks are consistently the most common threat that businesses face. Cybercriminals send emails or text messages that seem legitimate in order to steal employees’ passwords or bank information.
Q: How does ransomware affect small businesses?
A: Ransomware can knock your business offline, steal customer information, and cause your business significant financial strain. Many businesses never recover from these attacks, which cost hundreds to millions of dollars.
Q: Will cyber liability insurance cover any cyber attack?
A: Cyber insurance can cover you for many expenses related to cybersecurity. Every policy is different, but common coverages include data breach responses, ransomware recovery, and business interruptions.
Q: What are some ways I can secure my business from cyber threats?
A: Some of the best ways to secure your business from cyberattacks are by utilizing multi-factor authentication, training your employees on cybersecurity, regularly updating your software, securing your backups, enforcing password security, and using endpoint protection.