The rising importance of cyber insurance for small businesses
Cyber attacks are nothing new, yet the preparation and response of many small businesses are surprisingly unprepared for this prevalent threat. Incredibly 53% of executives pay hacker’s randoms, making their attacks a profitable and easy practice, and small businesses are losing the cybersecurity battle. Though many small businesses assume they do not have anything worth hacking, their lack of preparation and misjudgment makes them a perfect target. Proper cybersecurity aside, only half of all businesses have cyber insurance. For many businesses, this service can be incredibly important.
A recent article in Forbes demonstrates the implications of not having cyber insurance can be devastating. According to a study by Kaspersky Lab, a small business can stand to lose around $86,000 in an attack, and a larger enterprise can take a hit of up to $861,000, depending on the business’ vulnerability to attack. Moreover, if a business suffers two or more attacks, it is likely to damage the business beyond recovery. What’s more, the business is also at risk of facing a class action lawsuit from the individuals who suffered from a loss of data because of the cyber attack.
To get a better understanding of the importance of cyber insurance we spoke with Sudhir Bhatti, head of marketing at CyberCube, a best in class, industry recognised cyber risk modelling platform, who says “Many small business owners ignore the need for cyber insurance coverage because of their smaller size but the reality is that most small businesses hold sensitive information that could be exposed and potentially lead to hefty claims.”
He adds “Small businesses are also known for not following best cybersecurity practices. Any business with sensitive customer info, such as credit card data, is at risk. In case of a data breach or cyber attack, a small business owner could face fines to the tune of hundreds of thousands of dollars.”
Evidently, the fact that small business owners are unaware of how vulnerable they are to attacks makes them a perfect target. In order for businesses to guard themselves properly, it is paramount that the right protocols be set in place, utilizing cybersecurity and cyber insurance to defend themselves in the face of an attack.