Hidden Risks – Why Cyber Insurance is Essential for Your Small Business

Cyber threats are not just for large corporations anymore. Small and medium-sized businesses are equally in danger of experiencing phishing attacks, ransomware, malware, spyware, DOS attacks, hacking and information theft. Without the right protections and insurance safeguards, small and medium-sized businesses face serious disruptions and financial losses. Even businesses with stringent cyber security protocols need to be wary of hidden risks such as reputational damage, legal costs, business interruptions and compliance/regulatory fines. Let’s review the reasons why small businesses need to consider cyber insurance.

Small Businesses Are A Prime Target

Contrary to popular opinion, small and medium-sized businesses are a prime target for cybercriminals. They tend to have smaller budgets to invest in comprehensive cyber security protocols and often overlook less costly measures such as employee training or following best practices. According to recent data, nearly half of all cyberattacks target small businesses, with around 46% of cyber breaches affecting companies with less than 1,000 employees. Moreover, a third (37%) of small businesses (under 100 employees) have been hit by ransomware in the last year. The numbers tell us that small businesses from every industry and field are vulnerable to these attacks and should therefore take action to have a lifeline in place should this happen. That lifeline is cyber insurance. Sadly, a mere 26% of small businesses in the US have cyber Insurance according to a survey conducted by CNBC.

Small Businesses Lack Comprehensive Cyber Security

Whether it is due to smaller budgets or lack of IT experts, many small businesses do not have the same level of coverage when it comes to cyber security. Knowing this, many bad actors purposely target small businesses to take advantage of this weakened security, lack of employee training and vulnerabilities caused by smaller IT budgets.

Small Businesses Underestimate the Enemy

Small businesses often have leaders who are required to “wear many hats” making them especially vulnerable to cyber threats due to their lack of experience in understanding the enemy. In this case, the enemy is anyone with malicious thoughts of getting their hands on your sensitive business data. Having cyber insurance will help cover the costs of the damage the enemy can cause should they gain access to your system.

Small Businesses Risk Going Under Post-Cyber Attack

Unlike their larger business counterparts, small businesses risk losing it all should they lose access to their data, experience extended downtime or need to rebuild their reputation post-attack. The economic costs, legal consequences and reputational damage caused by a cyber attack can be powerful and costly enough to cause the demise of small businesses not equipped with cyber insurance to keep them afloat during the rebuilding process. Have questions about how cyber insurance works or need recommendations on the type and level of coverage you need? Reach out to the Spectra Networks team with your questions, comments, or concerns. We'll be here to assist you and your organization as soon as you call or submit a form.