Cyberattacks are becoming an all-too-common fact of life. It doesn’t matter if it’s a banking institution, power company or municipal government, cybercriminals will attack any business in search of a payout. Even small businesses, like landscaping companies and nurseries, aren’t immune to the possibility of a cyberattack.
In 2022 alone, the FBI’s Internet Crime Complaint Center (IC3), a public resource to submit reports of cyberattacks and incidents, received 800,944 complaints. While this was a 5% decrease compared to 2021, these complaints accounted for a potential loss of more than $10.2 billion.
This Cybersecurity Awareness Month, take steps to improve the safety and security of your business — your clients and bottom line will benefit from your diligence.
Why is Everyone So Cyber-Scared?
As a small business owner, you might think cybercriminals only target large companies where a significant payout is guaranteed — but that’s not the reality of today’s cybercriminals. With the use of automation increasing in cyberattacks, criminals no longer have to focus on larger companies to seize significant assets — whether it’s cash, banking credentials or personally identifiable information.
According to a 2023 Cyber Insurance Market Outlook compiled by Gallagher Franchise Solutions, ransomware attacks are especially prevalent among small- and medium-sized businesses. These attacks usually result in losses — with global damages expected to exceed $30 billion in 2023 — due to payment demands by the ransom holder and the necessary technology and data recovery efforts.
If you thought that $30 billion figure wasn’t terrifying enough, Cybersecurity Ventures predicts that cybercrime as a whole will inflict a whopping $8 trillion in damages globally in 2023 and reach $10.5 trillion annually by 2025. Affected companies suffer from operational disruption, lost revenue, harmed customer relationships and legal fees and penalties.
Luckily, there are ways for you to protect your business — and financial future — against hackers and cybercriminals.
Improving Your Cybersecurity
Cyberattacks can result in loss of revenue, theft of important client data and reputational damage. To protect your business from the substantial and potentially business-closing losses associated with cybercrime, try these tips:
Analyze your risk – Does your organization have a wireless network or company-owned mobile devices? Do you store client data in the cloud? Asking yourself questions like these as part of a regular risk assessment helps arm your company against threats. Cyber risk assessments are a proven way to protect networks and data while illuminating any shortfalls in your company’s security framework. Gallagher Franchise Solutions has developed a Cyber Risk Exposure Scorecard to help small businesses better understand their cyber risks.
Develop (and follow) cybersecurity policies and procedures – Stay ahead of cybercriminals by developing well-informed policies and procedures to keep client data in the right hands. A lost or improperly disposed company cellphone or laptop can be a gold mine for potential thieves, resulting in costly cyber incidents. Establish proper procedures and train your employees yearly to ensure they follow protocol and protect client data.
Stay alert – Cybercriminals’ approach has greatly evolved since they first appeared in the 1980s. Today, digital criminals are constantly developing new ways to target victims and infiltrate their systems. Similarly, small businesses need to stay alert for the newest scams and security risks to improve employee training, make timely improvements to security systems and enhance protocols. Follow trusted organizations like the FBI’s IC3, United States Secret Service and National Cybersecurity Alliance to stay on top of emerging threats.
Use security tools to safeguard your business – How secure are your important business accounts? When did you last update your operating system or third-party security software? Many tools are available to small business owners to safeguard their business, from security software to access controls and more. Many experts recommend establishing multifactor authentication — a multi-step verification process to access a secure application or online account that’s stronger than a conventional password — and staying on top of any security updates to your hardware and software. Doing so will help improve the security of your system and network.
While all these tips can help reduce your cyber risk, even the most diligent business owner can fall victim to cyber threats. Its effects on a business can be devastating, increasing the cost of doing business — with expenses including, but not limited to, ransom payments, remediation, legal fees and penalties — damaging reputations and harming client trust. Cyber insurance is a powerful tool that can help protect your business from significant losses and ensure an efficient response in the event of a breach.
When shopping for cyber insurance, the Federal Trade Commission advises business owners to look for a policy that includes first- and third-party coverage. First-party cyber coverage concerns data, such as employee, customer and vendor information. The policy should provide legal counsel to assist in your defense, aid in recovering or replacing data and organize a crisis response by notifying customers, establishing call centers and handling public relations.
Third-party coverage, meanwhile, can protect you and your business from liability if a third party, such as a client or vendor, brings claims against you in response to the breach. It can cover payments to affected consumers, claims and settlement expenses, costs for litigation and more.
Cyber insurance is valuable to small business owners because it can provide peace of mind and a reprieve from the repercussions that can accompany litigation. Instead of bearing the entire cost of the investigation and response, policyholders only have to worry about their insurance premiums. Contact your trusted insurance advisor today to find the right cyber liability insurance for your needs — before you become victim to a cyberattack. Contact MNLA’s insurance expert, Ashley Thomas, for a free risk analysis to learn more about your cyber risk. Find information about available coverage at gallagheraffinity.com/MNLA or contact Ashley Thomas of Gallagher Affinity at 918.764.1619 or firstname.lastname@example.org for a coverage review.
The information contained herein is offered as insurance Industry insight and provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer legal advice or client specific risk management advice. Any description of insurance coverages is not meant to interpret specific coverages that your company may already have in place or that may be generally available. General insurance descriptions contained herein do not include complete Insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. Actual insurance policies must always be consulted for full coverage details and analysis. Insurance brokerage and related services to be provided by Gallagher Affinity Insurance Services, Inc. (License No. 100310679 | CA License No. 0783129).
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