Short answer? Yes. Long answer? Also yes, but with layers of nuance, risk mitigation strategies, and, of course, the all-important question: Do you have the right commercial insurance coverage to handle it when things go sideways?
If you think cyberattacks are something only massive corporations like Target, Equifax, or Sony need to worry about, think again. The reality is small and midsize businesses (SMBs) are actually prime targets for cybercriminals?
According to various cybersecurity reports, SMBs are often seen as the low-hanging fruit, offering easier access with fewer security barriers in place.
Let’s take a closer look.
The Cyber Boogeyman is Real
Cyber threats don’t just come from hoodie-wearing hackers in a dimly lit basement surrounded by monitors filled with green code (although that is still a solid Hollywood trope).
Cybercriminals range from organized crime syndicates to rogue employees, and their tools of the trade include phishing scams, ransomware attacks, and data breaches.
Consider this: If Tony Stark can get hacked (Iron Man 3, anyone?), what’s stopping a determined cybercriminal from getting into your business’s database?
Even a simple phishing email that looks like it’s from a legitimate source can unleash havoc, leading to stolen financial data, locked-out systems, and ransoms that would make a Bond villain blush.
The Cost of Doing (Insecure) Business
Cyberattacks don’t just disrupt operations; they cost businesses big money.
Let’s look at the financial fallout:
- Ransomware attacks can demand payments ranging from a few thousand to millions of dollars.
- Downtime and lost productivity can cripple your ability to serve customers, leading to reputational damage.
- Legal fees and regulatory fines pile up if customer or employee data is exposed.
- Customer trust evaporates faster than your willpower at a pizza buffet.
Still think it won’t happen to you? Studies show that 60% of SMBs that suffer a cyberattack go out of business within six months.
Cyber Insurance: Your Digital Safety Net
This is where commercial insurance steps. Cyber insurance can help cover losses related to data breaches, ransomware payments, and business interruptions. But, as with any insurance policy, details matter.
Here’s what you should be looking for in a cyber liability policy:
- First-party coverage: Covers direct losses, such as extortion demands, data restoration, and income loss due to downtime.
- Third-party coverage: Helps with legal fees, lawsuits, and regulatory fines if customer or vendor data is compromised.
- Incident response services: Many insurers provide access to forensic experts, PR crisis teams, and legal counsel to help navigate the aftermath.
- Business interruption coverage: Reimburses lost revenue if operations are shut down due to an attack.
Don’t Just Insure—Defend!
Think of cyber insurance as a parachute—great to have, but you’d still rather not have to use it. The best strategy is a layered defense approach:
- Train employees to recognize phishing attempts and social engineering tactics.
- Use multi-factor authentication (MFA) on all critical accounts.
- Regularly update and patch systems because cybercriminals love outdated software like hipsters love vinyl.
- Back up data in secure, offsite locations.
- Work with a cybersecurity expert to identify vulnerabilities before the hackers do.
Final Verdict: Yes, You Should Be Worried—But You Should Also Be Prepared
Cyberattacks are no longer a hypothetical threat or something that only affects Fortune 500 companies. They are a very real and growing danger to businesses of all sizes.
But, with the right mix of proactive security measures and a robust cyber insurance policy, you can turn a potential digital disaster into just another day at the office.
Working with experts who understand your industry and specific exposures, like CNS Insurance, you can create a cybersecurity insurance policy that effectively mitigates the unique risks your business faces, ensuring you’re not over- or under-insured.
If you have any questions or concerns, please call us at 800.724.5523 or email info@cnsinsures.com.
