Any individual or business can be the target of a cyberattack. But small businesses are especially at risk because they typically are not able to devote as many of their resources to security as larger businesses can, leaving them vulnerable. This might mean a lack of robust security systems, including firewalls, antivirus, etc. or it might mean a lack of training regarding cybersecurity. And though resources may not be unlimited, businesses, especially small businesses, need to examine the potential risks and costs associated with cyberattacks.
According to The Balance, a recent cybersecurity study from the Ponemon Institute showed that 67% of the small and medium sized businesses that responded had suffered some type of cyberattack. These attacks can come from inside or outside the company, through various avenues, and they come in many different forms. The Balance cites the most common types of cyberattacks against businesses as malware, phishing, denial of service attacks, man-in-the-middle attacks, SQL injections, and zero-day exploits. Employees should have training on these types of attacks, as well as basic cybersecurity practices, to protect companies from exposure.
No matter how a cyberattack occurs, it can affect a business in several different ways:
- Lost or Damaged Data – Depending on the type of attack, data can be stolen or held ransom. Without this data, employees may be unable to perform regular job functions temporarily or permanently. Additionally, getting this data back, repaired, or recreated can be tedious and time consuming. To get ransomed data back, the company may have to pay a ransom to the hacker, which would cause financial loss, as well.
- Additional Expenses – In the event of a cyberattack, the company may need to obtain additional or new equipment, such as computers or phones, if some resources are compromised. This equipment will cost money that, unless specifically covered under an insurance policy, may not be reimbursable.
- Loss of Income – If data, equipment, or other components are compromised, the company may have to temporarily cease business operations, leading to a loss of income in the short-term on projects, salaries, etc. In some cases, companies may have to close permanently due to loss of income.
- Reputation Damage – Employees or other sources may communicate that there has been a cyberattack to the public. Often, companies are required to notify anyone whose data was breached while in their possession. Once this news hits the public, prospects and clients may not trust the affected company with their information in the future, leading to a loss of current and potential clients.
Most standard insurance policies include little to no coverage for any losses caused by cyberattacks. In order to ensure that a business is covered regarding cyber issues, a cyber liability policy should be in place. This type of policy can help to protect against financial loss in the event of a cyberattack.