While cybercrime is a growing concern among small business owners and managers, few small businesses are aware of the need for cyber liability coverage.
Cybercrime is a growing concern among small business owners and managers, but few small businesses are aware of the need for cyber liability coverage, according to a new survey from Selective Insurance.
The survey, conducted by Selective in conjunction with Appalachian State University, gathered responses from anonymous respondents who actively own or manage small businesses. The goal of the survey was to gauge the insurance impact of the pandemic on small businesses.
The findings determined that concern over cybersecurity has grown significantly during the pandemic, with 44% of owners and managers reporting they have been more concerned with cybersecurity and physical technology issues since the pandemic began.
There is good reason for this, even beside headlines like CNA's recent ransomware attack. Work-from-home practices forced on the business world by the pandemic have created “a playground for cyber-attackers," said Mike McMullin, vice president of small business at Selective. This is due to multiple factors, from criminals finding cybercrime more profitable amid employees conducting work remotely from unsecured internet connections or devices.
For small businesses with a handful of employees working from home, the risk might not seem that great. However, ransomware and phishing attacks have become the preferred method of theft for cybercriminals with these methods continually becoming more sophisticated.
But what are these cybercrimes and how do they steal from a business?
Phishing involves scammers sending fake emails to companies to persuade the recipient to visit a malicious website or disclose sensitive information. Phishing has become particularly advanced over the years, with scammers getting better at everything from targeting victims to disguising their identities, according to Robert McKenna, senior vice president of enterprise strategy and execution at Selective.
Ransomware, the malicious software that blocks a company's ability to access its own data, has also advanced significantly in recent years, with ransomware scammers now able to remove data from a target company's database or network.
Each of these crimes has serious potential to damage a small business's operations, and all it takes is a single employee working from home on an unsecured device or internet connection to create a weak spot for cybercriminals to exploit. And while many large-scale businesses have IT departments to handle the security of their online and digital operations, or the ability to send each employee home with a secured company device, small businesses don't always have that luxury.
With that in mind, one would think cyber insurance would be a top priority for small businesses. Yet, only 20% of surveyed small businesses have cyber insurance coverage. Considering that 28% of data breaches are directed at small businesses, the lack of coverage creates a concerning gap.
Jan Alex is an IA contributing reporter.