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Doug Miller is Partner and Senior Vice President of Specialty Risk at Kapnick Insurance Group. He is a seasoned advisory specialist and advocate in the complex and evolving needs of today’s corporate and personal liability risks, with a focus on publicly traded financial institutions and complex professional service organizations. With over 30 years of experience, he is well-versed in the insurance impacts of corporate transactions including claims, mergers and acquisitions, disinvestments, proxy fights, hostile takeovers, IPOs, stock spin-offs, reverse mergers and bankruptcy. Latest post by Doug Miller (view all)
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Recent high-profile cyber attacks on large companies such as Colonial Pipelines, JBS Meets and Solar Winds have raised awareness of the growing threat of cyber risk, and may signal to small businesses that they are safe. After all, what criminal will go after a small man when there are so many big fish in the net? Turns out, a lot.
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Figures from recent surveys conducted by the Small Business Authority, Symantec, Kaspersky Lab and the National Cyber Security Coalition are grim for small businesses:
Most small businesses in the US lack a formal Internet security policy for employees. Only half have even elementary cyber security measures in place. Only a quarter of small business owners have outside party testing their computer systems to ensure they are hacker-proof. About 40% do not have their data backed up in more than one place.
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These figures are great news for cybercriminals. The fewer security measures there are, the easier it will be for them to escape their crime.
5 of the Biggest Gaps in Cyber Liability Insurance
Attacks can destroy your business
As large companies get serious about data security, small businesses are becoming increasingly attractive targets – and the consequences are often disastrous for small business owners.
According to recent studies by NetDiligence and IBM/Ponemon, the average cost of a cyber attack for small and medium-sized businesses is between $717,000 and $4.25 million. Most small businesses don’t have that kind of money and as a result, many small businesses that suffer from cyberattacks are actually forced to close permanently.
Ransomware among the most dangerous threats
Ransomware is one of the worst cyber threats to small businesses. In fact, 75% of ransomware attacks in 2021 were against companies with fewer than 1,000 employees, with an average demand of $1.8 million and an average payout of $200,000 (Insurer Data/ITRC).
Ransomware is any type of malicious software that infects a computer and either prevents it from working or blocks access to certain files until the user pays a ransom. Businesses of all sizes are targets of ransomware, as it can infect not only individual computers, but entire networks and servers as well.
Cyber extortion from ransomware is a legitimate threat to all businesses – whatever the size. The best method of prevention is to back up confidential information and important files securely and regularly to a remote location that is not connected to your main network. In addition to backing up your files, it is essential to take the following prevention measures:
Implement Multifactor Authentication (MFA) and Endpoint Detection and Response (EDR) protocols for your entire network. Encrypt your laptop, desktop and portable media devices. Provide strong cyber security awareness training to your employees. Understand your exposure to your vendors and supply chain. Buy cyber liability insurance that not only helps you respond to threats, but can also help cover ransom costs and any other damages that may result from a cyber attack.
In addition to the above tips, the Federal Communications Commission (FCC) offers a tool for small businesses that can create and save a custom cybersecurity plan. It can be accessed at www.fcc.gov/cyberplanner.
Additional ransomware-specific resources are available from the US Cybersecurity and Infrastructure Security Administration (CISA) and can be found at www.cisa.gov/stopransomware/ransomware-101.
Your Emerging Technology Partner
A cyber attack can cripple your small business, costing you thousands or even millions of dollars in sales and/or losses. For more information on how to protect your business from ransomware and other cyber threats, please contact the cyber experts at Kapnik here. [email protected],
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