What do you think when you hear the words, “cyber attack”? If you’re like most, it’s probably recent large scale data breaches, like the Target, Yahoo, and Equifax. Or maybe it’s the “Wannacry” ransomware attack that affected millions worldwide and had us scared to open our computers for a week. These massive attacks are why Fortune 1000 companies are flocking towards cyber security and cyber insurance. Good thing we small businesses are flying under that radar, right?
Wrong. According to the 2016 Verizon Data Breach Investigation Report, 51 percent of all cyber security attacks were targeted at small businesses. By 2017, that number had jumped to over 61 percent.
If you think your business is safe from cyber attacks because you’re “too small to hack,” think again—small businesses are a major target of hackers precisely because of this mentality. Let’s take a deep dive into the cyber threats your small business faces, and how you can protect yourself.
Small Businesses Lack Resources for Security
What we’ve been seeing is a clear shift in focus, with hackers now targeting small businesses over larger enterprises. But why?
Enterprise-level companies can invest millions in cyber security while the majority of small businesses may not even have a full-time IT person, much less a team with tools protecting you from cyber attack. And while it’s helpful to have a firewall, antivirus software, and third parties to handle secure data, your small business is still very open to an attack.
Here are a few steps any business could (and should) do to protect themselves:
- Update all systems and browsers when new updates come out—or better yet, ensure you are set to auto-update
- Require employees to add passcodes to their phones if they use them for business purposes
- Add multi-factor authentication to your access points like Gmail or Outlook
- Install anti-virus software if you haven’t already
- Digitize, then shred, all documents containing sensitive information
The True Cost Of A Data Breach
You are legally required to report a breach and notify your customers for every one of their records compromised, and although it varies across industries, the average cost per breached record is $141.
That adds up quickly. According to UPS Capital, the average cyber security breach costs a small business owner between $84,000 and $148,000. And that doesn’t take into account your time or loss of business due to the loss of customer’s trust.
Even more alarming is the rate at which small businesses fail after a breach. Over 60 percent of small businesses fold within six months of a data breach. When something as simple as an employee opening a phishing email can doom the business you’ve worked so hard to create, the cyber security stakes are sky-high.
Cyber Security Measures Only Take You So Far
Numbers vary across studies, but nearly all of them show that at least 50 percent of data breaches are caused by human error, the most common occurrence being when an employee clicks on a compromised link in an email. For most small businesses, including the Fortune 1000, their greatest vulnerability is not weak security measures, but their own employees.
As you’re reading this, think back to a time when you clicked on an email from an unknown source. Was it yesterday? This morning? It happens all the time, and sometimes that’s all it takes. Scary.
Invest In A Backup Plan – Cyber Liability Insurance
Cyber liability insurance covers the financial costs of a cyber attack, including the costs of stopping the breach, replacing lost or damaged data, analyzing your systems, identifying and fixing vulnerabilities, adding new security layers, notifying customers, dealing with any public relations fallout, and legal fees if you face lawsuits or fines. Cyber liability insurance is a virtual SWAT team that can stem both the financial fallout and more importantly the reputational one.
These policies are tailored for your business, with limits starting as low as $100,000. In fact, $1 million in coverage can cost $1,000 per year or less depending on your risk factors. In a world where over 60 percent of all attacks are targeted at small business, this is a small price to pay to know you and your customers are covered.
The SmallBizRising Blog is designed to be an educational content hub pulling information, best practices and practical advice for the small business owner and features topics including accounting, marketing, technology and more. Be sure to subscribe to stay up to date with new content as it is posted. The blog was created by The Neat Company and receives contributed content from a group of contributing companies that provide technology, services and solutions to small businesses.