MANAGE TECHNOLOGY & LEAD
REDUCING THE IMPACT OF CYBER- CRIME ON SMALL BUSINESSES
Cybersecurity is essential for small businesses , which are woefully unprepared and uninsured .
By : Jeff Weaver
Cybercrime against small businesses rose sharply last year and shows no signs of abating . And yet , a survey of small businesses conducted by Appalachian State University in coordination with Selective found that only 20 % of small businesses had cyber insurance .
Cybercrime is a risk for which small businesses are woefully unprepared and uninsured — this lack of preparedness takes a high toll . Research from IBM and the Ponemon Institute ' s 2021 Cost of a Data Breach Report shows that small organizations ( those with fewer than 500 employees ) spend an average of nearly $ 3 million per data breach incident .
However , there are other non-monetary costs . The company ' s reputation takes a hit because it may lose the trust of employees , customers , and vendors . It must spend valuable time and resources , including paying legal fees , to react to the attack and notify impacted parties and stakeholders about the breach .
Protecting Small Business Through Cyber Risk Mitigation Just as you would advise a client who buys general liability insurance to take steps to reduce their exposure , consider advising clients to take steps to minimize their cyber risk . They might be surprised to learn some of the cost-effective steps they can take to improve their risk profile .
For example , while educating and training employees is inexpensive , it may also be the single-best strategy at the disposal of small businesses to prevent cyber incursions .
According to a study by IBM , as many as 95 % of cyber breaches are caused by human error . A compromised password or a click on a disguised link in an email is often all it takes for a cybercriminal to access a company ' s data . Proper training can help employees reduce such risks . Not all cybersecurity improvements come at a cost . Small businesses that use programs and tools today , such as Microsoft or Google Workspace , have easily enabled security features , such as multi-factor authentication ( MFA ).
MFA is an effective tool to help control access to a website , secure data , or an online account . According to Microsoft , MFA can block over 99.9 % of account compromise attacks . Using MFA is easy and affordable — you have to turn it on . Beyond Cyber Preparedness : Cyber Insurance
By ensuring your small business customers have cyber insurance coverage , you are helping to protect them against escalating cybercrime . Cyber liability policies help reduce the financial impact of a cyber event . At the same time , experienced claims handlers and breach response teams can mitigate the time your clients spend away from running their business .
Cyber insurance policies provide three main types of coverage :
• First-party coverages . For costs the client incurs as a result of a cyber event , such as expenses for recovering data , notifications to stakeholders , public
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