If you think hackers only attack big businesses, think again. Reports show that over a third of global targeted attacks were aimed at businesses with less than 250 employees.
And unfortunately, small enterprises often don’t have the financial resources to recover from the losses caused by a hacking attack or any other kind of data breach.
Here are 7 practical reasons why cyber security should be top priority for small businesses:
1. Your standard property insurance policy doesn’t cover data
Cyber crime is one of the fastest growing offences in the world, yet most attacks are not covered by standard property or crime insurance policies. While the Internet is making business more convenient than ever before, it’s also making it vulnerable to criminal attacks like phishing scams, identity theft and telephone hacking. Because a standard property insurance policy does not cover data, if you’re protecting the premises and physical contents of your office, it only makes sense to also insure your precious data in case of damage or loss.
2. What happens if your business depends on data systems
When your core business relies on systems such as electronic point of sales software or holiday reservation systems - if your system is hacked or gets infected by a computer virus, cyber insurance can cover for loss of profits due to systems outage.
3. You’re responsible for your customers’ data
You have to realise that it’s not just about your company data but also your customers’ data. If you have access to data from your clients, customers, or suppliers, you can be held liable if you lose it. Non-disclosure agreements and commercial contracts often contain warranties and indemnities with regard to the security of this data that can trigger expensive damages claims in the event that you experience a breach.
4. You have to protect credit card data
Retailers have to be extra cautious about protecting credit card data. Under merchant service agreements, compromised retailers can be held liable for forensic investigation costs, credit care reissuance costs and the actual fraud conducted on stolen cards. These losses can run into hundreds of thousands of dollars even for a small business.
5. Your reputation is at stake
You need to protect your brand’s reputation in case of a security breach. If your systems are compromised, you’re at risk of losing the trust of your loyal customers which can negatively impact your business in the long run. Cyber insurance can actually help pay the costs of engaging a PR firm to help restore your reputation, as well as for the loss of future sales that may arise as a direct result of customers switching to your competitors.
6. Beware of social media
We’re all aware how prolific the use of social media is - it’s difficult to control what and how information is exchanged over these platforms. So for businesses that are responsible for the actions of their employees on social platforms such as LinkedIn, Twitter and Facebook, cyber security can help provide cover for claims arising from leaked information, defamatory statements or copyright infringement.
7. Portable devices increase risk of data loss or theft
We’re living in an age that supports a flexible working environment, which means employees often work from home or remote locations. This leads to the advent of portable devices and the risk of losing these along with the data stored in them. It’s not uncommon to hear of people losing the work laptops or have a phone or iPad stolen. Cyber insurance can help cover the costs associated with a data breach if a portable device is lost, stolen or affected by a virus.