One of the greatest threats businesses face today falls in the area of cyber risk: Phishing attacks, data breaches, ransomware attacks and social engineering are some top concerns especially for SMBs. Experts in the cyber arena predict that all businesses will at some point face a cyber-attack. The matter isn’t if, but when.
The U.S. House of Representatives Committee on Small Business reports that approximately 40% of all cyber-attacks impact companies with fewer than 500 employees. Despite these odds, only 14% of SMBs have a plan in place for how they will manage if they are hacked.
While attacks against large entities dominate headlines, it’s imperative for all companies to realize that the danger is real. According to an Inc and Cisco report, 60% of SMBs go out of business within six months of a cyber breach.
Make Sure Investments in Security Actually Minimize Risk
While companies are starting to spend more on security, that doesn’t mean the risk is completely mitigated. No single piece of technology can prevent cyber-attacks from occurring, so business leaders and owners need to be cautious of promises by software companies, which can provide a false sense of security that simply may not hold up against all attacks.
Facing Risk Head-On
Insurance companies are taking steps to get a firmer handle on cyber risk. Some leading insurance companies are using friendly hackers and cyber experts to approach the underwriting process and determine a company’s risk profile.
The industry is working fast to provide support to companies that experience a breach. Providing the right software and systems is something some insurers are doing, while also offering incident response services — such as a team of security experts that work around the clock to restore stability post-breach.
There is big business ahead in this area: cyber insurance in the future will likely be as common as property and general liability coverages.
Insurance as a Necessity
Breaches can mean absolute and ultimate devastation for a company — particularly smaller entities, which are more vulnerable. Due to this, the demand for cyber insurance is rising; more and more companies are seeing cyber insurance as the best foot forward to protect themselves and to continue business as usual while recuperating from damages and costs that coincide with attacks. In fact, by decade’s end, the sector is expected to reach $7.5 billion valuation.
SMBs are most in jeopardy of threats of cyber-attacks, so it makes sense that these businesses not only take steps to protect their systems and information but also carry adequate insurance if the worst does occur. The reality is that most companies will in the future — if not the near future — become victim of a cyber-attack. Cyber insurance policies, in addition to cyber security, are the best bet to persevere and keep the company in business.
Our consultative experts are able to provide businesses with tailored coverage, tangible risk management, and local claims expertise — all of which help the companies they work with to avoid, mitigate, and recover from loss.
Contact your local Acadia Insurance agent to get started, or find an agent near you using our agent locator.
Acadia Insurance is pleased to share this material with its customers. Please note, however, that nothing in this document should be construed as legal advice or the provision of professional consulting services. This material is for general informational purposes only, and while reasonable care has been utilized in compiling this information, no warranty or representation is made as to accuracy or completeness.