Recent statistics demonstrate that small businesses are more vulnerable and thus at a higher risk for cyber attacks. In fact, studies have found that around 40 percent of all cyber attacks are aimed at small businesses, with more than 72 percent of all successful data breaches happening in small companies. Furthermore, although around 71 percent of small business owners admit to a lack of confidence when it comes to cyber security, as many as 65 percent go without cyber insurance.
Given that the average cost of a data breach to a small business is around $5 million, cyber security (or the lack thereof) has become a major focus in the small business world. Experts agree that one of the dominant factors driving these statistics is the fact that smaller firms have access to fewer resources to devote to cyber security. However, when a data breach does occur, the fallout can be tremendous, involving lawsuits, site repair costs, public relations and media outreach costs, and lost business due to shattered consumer confidence.
However, there are certain steps that small business owners can take to minimize their risks. For instance, more than half of data breaches are actually caused by weak or easily guessable passwords—a risk factor that can be addressed via more complex passwords that are changed on a regular basis. In addition, many security breaches are caused by a virus compromising the company’s website, contact list, or computer network, and the implementation of virus protection, firewalls, and encryption techniques will all make the entire IT system less vulnerable to attack. Cyber liability insurance is also available as an add on to a general liability policy to cover any legal and recuperative costs that stem from a cyber attack—or for businesses that have larger data security needs, a stand-alone cyber policy can be purchased.
The bottom line is, statistics show that hackers often see small businesses as prime targets, as the data being stored is usually less diligently protected than the information being held by large corporations. In order to protect their interests as well as their customers’, small businesses need to implement strategies and initiatives to keep their risk of data breaches as low as possible.
Devine, Ted. “The Smallest Businesses Face the Biggest Cyber Risks.” Small Business Trends. 2/21/13.