hacker guessing passwordCybercriminals have a significant advantage over businesses. They are always working on new tactics that keep the cyber risk landscape in a constant state of flux. Meanwhile, companies can’t predict when a hacker will strike, and many of their reactionary efforts prove futile or lacking. Small businesses are particularly vulnerable, and many underestimate or don’t understand the risk. Their cybersecurity insurance policies, if they invest in any at all, often fail to provide the coverage they need.

Small Businesses Fail to Appreciate Their Cyber Risks

Quarter after quarter, small businesses consistently rank cybersecurity as their lowest priority compared to other perceived threats. CNBC polled small business owners during the fourth quarter to identify the biggest perceived risks to their companies. Inflation claimed the lion’s share at 45%, followed by supply chain disruptions (17%), labor shortages (14%), and COVID (7%). Other risks or lack of answers made up 12% of the replies. Cybersecurity came in at a meager 4%—unchanged from the previous quarter and down a percentage from the second quarter.

Why Cyber Criminals Target Small Businesses

Small business owners consistently underestimate their cyber risks and neglect to take the appropriate precautions. For example, many lack data security software; 51% don’t have antivirus or malware programs installed on company devices, and 53% don’t have data backups. Some companies neglect cybersecurity because of the expense, while others simply don’t have enough knowledge to protect against the relevant risks.

However, the misconception that small businesses aren’t a lucrative enough target for cybercriminals is often at the heart of insufficient cybersecurity. Successful data breaches in big corporations make headlines because of the shocking cost. However, larger organizations tend to have multilayered cyber protections in place. They present a bigger payout, but they’re harder to breach. In contrast, small businesses with minimal security are easy targets.

Small Businesses Need Robust Cybersecurity Protections

Only 34% of small businesses have response plans for cyberattacks, which isn’t surprising given that only 38% are worried about falling victim to cyberattacks. They’re also falsely confident of their ability to recover from one, as 62% believe they can resolve the attacks quickly. Unfortunately, 60% of them go out of business within six months of a successful cyberattack or breach.

Implementing cybersecurity strategies and policies are essential to protecting against cyber criminals. Some simple measures include using strong passwords, requiring multifactor authentication (MFA), performing regular data backups, and storing that information externally and securely (e.g., on the cloud). More advanced methods include installing cybersecurity hardware and software, providing regular cybersecurity training for all staff members, and developing business continuity and response plans for cyberattacks.

Small businesses can’t afford to overlook their cyber risks. Prevention is critical, but so is cyber insurance. Business owners need cyber liability policies that are as comprehensive as the cybersecurity landscape is complex. Contact Windermere Insurance Group to learn more about protecting your company from cyber threats.