Many small business owners believe they don’t have to worry much about cyber crime. After all, why would internet criminals bother with small businesses when they could target larger ones?
Unfortunately, cyber criminals are equal-opportunity offenders. While they do target large organizations, they also know these companies invest heavily in cybersecurity. It’s often quicker and easier for them to extort $1,000 from 1,000 small businesses with ransomware than to try to hack a larger business for $1 million.
While cyber attacks on multinationals get media attention, millions of small businesses are targeted each year without making headlines.
Cybercrime costs the global economy around US$500 billion annually, and about 20% of small businesses have been targeted by malicious actors.
What is Cybercrime?
Cyber crime includes:
- Identity theft
- Cyber stalking
- Malware
- Viruses
- Computer and network hacking
- Online scams
- Phishing scams
- Fraud
- Information theft
- Extortion
Anyone using a computer, mobile phone, or tablet for work purposes can be a victim of cyber crime.
What Happens if My Security is Breached?
The two cybercrimes small business owners most need to worry about are ransomware attacks and data breaches.
- Ransomware attacks: Your business’s files are encrypted and unusable, halting operations and revenue. The average ransom demand is around $1,000.
- Data breaches: Cybercriminals steal customer or staff data (addresses, bank details) for identity theft, fraud, or extortion.
The Notifiable Data Breach (NDB) scheme requires businesses to notify individuals affected by data breaches that could result in serious harm. Non-compliance can result in fines of up to $2.1 million, while compliance could lead to legal claims and loss of client trust.
Minimising the Risk of a Cyber Attack
Minimize the risk with:
- Reputable anti-virus programs
- Secure data backups
- Firewall technology
- Data encryption
- Sensible policies for equipment use (especially BYOD gear)
Even with all the right systems, your business is still at risk. If major banks and governments can fall victim to cyberattacks, so can you.
What Does Cyber Insurance Cover?
While you can’t guarantee complete security, you can insure against the costs of a cyber breach. Cyber insurance can cover:
- Business interruption
- Hiring negotiators and paying ransoms
- Recovering or replacing records or data
- Liability and loss of third-party data
- Legal defense
- Copyright infringement
- Misuse of intellectual property online
- Crisis management and monitoring
- Prevention of further attacks
Next Steps
To learn more about the threat cybercrime poses to small businesses – chat to your insurance broker or ask for a referral.
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