Small Businesses are Targets for Cyber-Attacks
With the increased risk of cyber-attacks to small & mid-size businesses, setting up processes to prevent data security breaches is the most responsible course of action after having adequate professional Cyber Liability Insurance.
Cyber Attack – 43% Target Small Businesses
The statistics on Cyber Attacks to small businesses is staggering. Here are just a few surprising cyber security statistics (from 2021):
- 43% of cyber-attacks target small businesses.
- 60% of small businesses that are victims of a cyber-attack go out of business within six months.
- 91% of small businesses don’t have cyber liability insurance.
- Cyber-attacks caused by compromised employee passwords cost $383,365 on average.
- 54% of small businesses think they’re too small for a cyber-attack.
- Small businesses spend an average of $955,429 to restore normal business in the wake of successful attacks.
Now consider how many of your customers pay by credit card? The number has increase ten-fold in the last 20 years. In fact, I would venture to say that most people don’t even carry cash nowadays. Do you? Consider where and how you are currently storing your customer’s personal credit information or Payment Card Information (PCI). Is it secure? Consider that 63% of confirmed data breaches are due to a weak, default, or stolen password. Are your passwords secure?
Cost of Cyber Attacks
It’s unimaginable to consider your business suffering a cyber-attack, but experts will tell you “It’s not if, but when”. Cybercrime costs small and medium businesses more the $2.2 Million a year. Cyber attacks caused by compromised employee passwords costs $383,365 on average. Small businesses spend an average of $955,429 to restore normal business in the wake of a successful attack. Just figuring out how the attack happened can cost upwards of $15,000. Now consider the time your business needs to be down while dealing with an attack. 40% of small businesses experienced 8 or more hours of downtime due to a cyber breach.
Imagine, you discover your computer system has been hacked. You now must, not only secure the data, but also notify all your customers that their data has been compromised. What affect could that have on your business? Would you go back to a business where your personal data had been compromised? Now consider the costs involved: initial investigation; customer notification, regulatory fines & penalties; possible class action lawsuits. 60% of small to mid-size businesses that suffer a cyber attack go out of business within 6 months. That’s a frightening thought to any business owner.
CLICK HERE – to calculate the estimated cost of a cyber attack to your business.
Is your business prepared?
Most small and mid-size businesses are no where near prepared for an attack. Although 66% of small businesses are concerned about cyber security, only 14% of businesses rate their ability to mitigate cyber risks and attacks as highly effective. In fact, 47% of small business owners say they have no understanding of how to protect themselves against cyber-attacks.
Consider that 25% of small businesses think they are too small for a cyber-attack, but the reality is that in some cases, they are more at risk because hackers see them as easy targets. As small businesses handle customer data—and don’t necessarily have the resources to keep it as secure as larger businesses—they’re often targets for cyber-crimes. Industry experts say a small business’s cyber security budget should be at least 3% of the company’s total spending. What’s your Cyber Security budget?
How to protect your business from Cyber-Attacks
With the increased risk of cyber-attacks to small & mid-size businesses, setting up processes to prevent data security breaches is the most responsible course of action after having adequate professional Cyber Liability insurance.
Cyber Risk Insurance or “Cyber Liability Insurance” coverage enables businesses to transfer the costs involved with recovery from a cyber-related security breach or similar events. The most important aspect of this cyber coverage is network security coverage, which responds in the event of a network security failure, such as data breaches, malware, ransomware and business account or email compromises. The policy may also respond to liability claims and other expenses of an attack or breach.
Business owners must also consider the regulatory or contractual responsibilities with regards to customer’s personal information. If your business stores customer’s data, such as names, addresses, credit card info, Social Security numbers and more, on any type of computer system (on or offline), there are regulatory obligations to keep that data secure. This causes higher price tags in the event of a breach.
Does your business need better coverage? Arrowhead Automotive Insurance can help. CLICK HERE to get a quote on your business insurance and be sure to include Cyber coverage.
About Arrowhead Automotive Insurance
We are a leading national insurance agency providing Insurance for the Automotive Dealer and Aftermarket Industries. With our team of more than 100 sales and support professionals in nearly every state and decades of dedication and unwavering commitment to your industry, we have the unique experience and knowledge to thoroughly evaluate the needs of your business. Our influential relationships with top insurance companies and industry organizations allow our agency to provide unrivaled, personalized solutions. For more information call 888-240-8803.
Statistical data gleaned from:
Fundera by Nerdwallet - 30 Surprising Small Business Cyber Security Statistics (2021) - Fundera Ledger
eRiskHub - eRiskHub - NetDiligence® Mini Data Breach Cost Calculator