Hackers are Taking Aim At Small Businesses, and Cybersecurity is Stepping Up

Discussing the need for proper cybersecurity and cyber liability insurance 

Key Takeaways:

• Cybercrime is increasing, and in 2020, the cost to businesses was $2.7 billion.
• The average cost of a small business cyberattack is $24,000.
• 46% of companies that had a data breach suffered reputational damage, and 60% of small businesses go out of business within six months of a breach.
• Artificial Intelligence and machine learning are two tech tools that will be used to detect and stop breaches
• Blockchain and cyber warfare are also predicted to be a focus within cybersecurity. 

Cybercrime is rampant, and cybersecurity is top-of-mind for most businesses. Unfortunately, small businesses often lag behind their larger counterparts when it comes to protecting their data because they lack resources. Proper precautions for remote workers are often neglected, too. While most will remember 2020 as the year of the pandemic, the FBI will also remember it as a banner year for opportunistic cybercriminals.

We’ll get into the frightening statistics faced by small businesses as well as those with remote workers. We’ll talk about common cyber threats and how cybersecurity is evolving in an attempt to stay one step ahead of malicious actors. We’ll also discuss how if you don’t have cyber liability insurance, you are at a much greater risk for paying large monetary damages.  

Small business cyberattack statistics

The cost of cybercrime was $2.7 billion in 2020. That same year, small businesses (1-49 employees) lost an average of $24,000 each as a result of cyberattacks. Let’s take a look at some eye-opening stats on the losses faced by small businesses. 

• 43% of all data breaches involve small and medium-sized businesses (SMBs). 
• Your chance of becoming a victim is high. In the previous year, 61% of all SMBs reported at least one cyberattack.
• The Cisco 2018 Security Capabilities Benchmark Study found that 40% of small businesses that suffered a severe cyberattack faced a minimum of eight hours of downtime, which accounted for most of the overall cost of the breach. 
• The same study reported that ransomware was not identified as one of the top three threats by small business leaders. However, they may be underestimating ransomware as a threat against SMBs. An astounding 43% of SMBs have no cybersecurity at all. 
• After falling victim to an attack, 60% of small companies go out of business within six months. 

Despite these startling statistics, many small businesses do not have cyber liability insurance, which highlights how unprepared they are to deal with and recover from security breaches. Experts in cybersecurity estimate that there will be a cyberattack every 11 seconds in 2021, up from every 19 seconds in 2019, and quadruple the rate in 2016.

And, it’s not just about money. A recent report discovered that 46% of organizations suffered reputational damage because of a data breach and 19% suffered reputation and brand damage resulting from a third-party security breach. We can keep going with the statistics, but you’re probably wondering what advances experts are making in dealing with these threats. Let’s talk about the future of cybersecurity. 

The future of cybersecurity

Many small businesses have moved their data and applications to the cloud as the pandemic spurred digital transformation and an increase in remote working. Even after the pandemic is considered over, it’s estimated that 25% to 30% of the workforce will continue to work from home at least one day a week. This is a significant shift. 

This means locations and devices used are fluid, which adds a dimension to security, and companies will be relying on cloud service applications. These Software-as-a-Service (SaaS) applications are considered an important part of the future of cloud security. Let’s take a look at other solutions predicted to boost cybersafety:

• Artificial Intelligence (AI) – AI and machine learning, a branch of AI, will be used by developers to deal with vulnerabilities and to discover security issues before an attack, as well as fend off attacks after they’ve happened.

AI is a critical tool against hackers because it will, over time, become a big target for them. AI can be embedded in user interfaces to warn against risks, as well as in attack simulations to improve defense and response. 

• A focus on cyberwarfare – It sounds like something out of a James Bond movie, but it might be the new global battlefield, where even impoverished countries can fight wars. We’re talking about state-sanctioned or state-run cyberwarfare, when computer worms are planted to cause equipment failure or other problems. 

To counter these attacks, cybersecurity experts will have to figure out how to make key pieces of infrastructure that would be appealing to targets more resilient to digital invasion. Perhaps they can add multiple layers of security to infrastructure systems and healthcare databases. 

• Automated networks – Automation permits the scanning and monitoring of connected networks in real-time to detect and report any deviations and anomalies. You also can automatically update your defense framework, including network, endpoint, firewalls, and anti-virus, as well as the diagnostic tools you use for cybersecurity. This is an area where AI can be a big help. 
• Blockchain – Blockchain is a shared, immutable ledger in a business network that drives the process of recording transactions as well as tracking assets. It simultaneously delivers authentication and resolves a single point of attack.

Your company security system can leverage a distributed public key infrastructure to authenticate both users and devices. The use of Blockchain technology with AI can set up a strong verification system that can keep cyber threats at bay. As cybersecurity technology evolves, so does the attack technology used by hackers. No system is completely secure, which is why, given the increasing threats, you cannot afford to be without cyber liability insurance.

Cyber liability insurance is very important

We’re sure you don’t want to go out of business due to a cyberattack, and that you want to be on the right side of the law if you suffer a data breach with personal customer information. At a bare minimum, cyber liability insurance helps companies comply with state regulations that require a business to notify customers of a data breach of their information. But it does far more than that. Policies can also cover: 

• Compensation for legal fees and expenses
• The cost of notifying customers
• The cost of identity theft protection for a specified period for those impacted 
• The cost to recover your compromised data
• Costs to repair damaged computer systems

Unless you want to pay for all of this out-of-pocket, cyber liability insurance is essential. All businesses need it since attacks are common. Remember, SMBs are not only liable to be attacked, they’re highly targeted!

It’s time to talk to Avante about protecting your business with cyber liability insurance 

Cyber threats are everywhere and they’re only increasing. You might think you aren’t at risk, but small businesses, as well as remote workers, are easy pickings for hackers. And, remote work is still very big and predicted to stay common. 

At Avante Insurance, we’ll work with you to build the complete coverage you need with a deductible that works for you. Reach out today to discuss purchasing a cyber liability policy because you never know what tomorrow will bring. At Avante, we’re always standing by.

This blog and website are made available by the publisher for educational and informational purposes only. It is not to be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state.