Why cyber insurance is for businesses of all sizes

It feels like barely a week goes by without news of another high profile cyber-attack or data breach, affecting millions or even billions of people. Attacks happen so often that we may be desensitised to the numbers, but the cost to individuals and businesses is staggering.

To put things into perspective, it’s estimated that cybercrime will cost the world $10.5 trillion annually by 2025.

As attacks on large corporations dominate press coverage, it’s easy to incorrectly assume that small businesses are less of a target - but this unfortunately isn’t the case. In fact, the increased vulnerabilities of smaller businesses without dedicated cybersecurity resources makes them attractive targets for cybercriminals.

What makes a small business vulnerable?

The number of specific vulnerabilities are too many to list but the following are high-level vulnerabilities that are commonly seen in small businesses.

Lack of cybersecurity expertise
Small businesses often don't have in-house support when it comes to IT security. Cybersecurity is a complex and multi-faceted issue that requires the right technology and the right policies and processes in place - plus it’s always changing - staying on top of things is an uphill battle.

Poor data management
As a business grows, so typically does the data it stores and handles. Processes get complicated and seemingly small mistakes in handling data or deviations from proper process can leave you exposed to attacks and even fines. Furthermore, small businesses are seen by hackers as a weak link, giving them a back door entry point to the systems of larger businesses.

Unsecure connections
Many startups and small businesses have freelancers or remote workers accessing their systems from local coffee shops or coworking spaces. If that's the case and there's no secure Wi-Fi connection, hackers can easily steal your data.
Our insurance partner, Superscript, carried out a survey to identify the most common cybersecurity bad habits that impact businesses in the UK and put together a useful guide to help you avoid making these mistakes - plus a guide to the tools to help you stay on top of cybersecurity.

How cyber insurance can help
Even with protective measures, breaches happen. So what can you do to make the best of a challenging situation? A planned response plan with the right resources is key to avoiding unnecessary further damage.

An effective response plan should address the following points, which cyber insurance can help with:

Customer communications
Providing timely and considered customer communications altering those affected by the data breach is important. Not doing so correctly can have a range of seriously negative consequences, from fines to more serious reputational damage.

Legal aspects
Every step you take in navigating the breach needs to be considered by a legal perspective. Bear in mind that your business is required to inform any breach or suspected breach to the Information Commissioner’s Office (ICO) and defend itself against any claims of negligence. If you - like many small businesses - don’t have in-house legal expertise in this area, cyber insurance can be a life-saver as it provides this support.

Media response
If the media does pick up on a breach involving your business, things have the potential to run wild. Cyber insurance can provide PR crisis and press management expertise to help you get through this as intact as possible.

IT support
As outlined above, a breach presents a deluge of work before even getting to fixing the root issue. Cyber insurance provides IT forensics experts to identify the cause of the breach and determine the best way to move forwards so that it can’t happen again.

To find out more about what cyber insurance covers, check out our partner Superscript’s cyber insurance page.