Why SMBs Need To Consider Cyber Insurance

 Cybersecurity threats are becoming more dangerous. Ransomware attacks are increasing, with the frequency of these attacks more than doubling over the past few years . Cloud-based attacks continue catching insecure companies off guard. It is not enough to just invest in security technology and hope that your company doesn't fall prey to an attack. Organizations must be ready for what is inevitable, such as a data breach or security incident.

SMBs are particularly at risk. SMBs are more vulnerable to attacks than well-funded companies. Follina and log4j are just two examples of vulnerabilities that make them more at risk. Hackers are aware that SMBs are prime targets, and they are now targeting them with attacks.

SMBs can take advantage of cyber insurance to mitigate this cyber risk. This is crucial for ensuring a healthy recovery after a cyberattack as it reduces many of the financial repercussions that can be associated with data breaches or cyber attacks.

We'll explain why small businesses need to look for cyber insurance providers in this article.

SMBs are more at risk

SMBs have limited budgets and are unable to plan for ransomware attacks or data breaches that could impact business continuity. The average cost of a data breach is $4.24M according to the IBM Cost of a Data Breach Report. These costs include the cost of investigation, recovery and remediation services, which are essential steps for any company that needs to recover properly.

It's not an ideal situation, but large companies with high revenues and profits can afford these expenses more easily. However, smaller companies may not be able to afford these costs and could see their business interrupted by an attack. The severity of the incident can lead to revenue losses and even loss of customers. An SMB may need to recover and return to normal within a few months or years.

60% end up closing down after being hit by a databreach. This is because of the damage and risk that comes with it. Cybersecurity risk can easily translate into financial and business risks -- SMBs who don't have any risk management services or controls in place are vulnerable to an attack they cannot afford.

Small and Medium-sized Businesses (SMBs) don't have the enterprise-level cybersecurity resources

SMBs have less resources, both in terms of budget and staff. These limitations make it difficult for SMBs not to spend a substantial amount of their budget on a strong cybersecurity department. SMBs would not benefit from a part-time cybersecurity department if they had an effective cybersecurity team in place.

Even if an SMB tries to build their cybersecurity properly, it can take many years before they realize any cybersecurity value. This is especially true if there is a need to have a large cybersecurity department. SMBs might not have the right people or leaders with the right cybersecurity experience. This makes it difficult to prioritize cybersecurity and create a plan for cyber resilience.

Many SMBs turn to MSPs and third-party services to provide cybersecurity support. While this can provide valuable services, it could leave an organization vulnerable to a supply chain attack that uses the MSP as an attack vector.

Small and Medium-sized Businesses (SMMEs) are at greater cyber risk

Most attacks by malicious hackers or threat actors are automated. This is why attacks are launched every 39 seconds, and more than 30K websites are hacked each day. These automated attacks are always looking for victims or companies with weak security measures. This often means that an SMB is at risk.

SMBs are more vulnerable to being attacked because they lack the necessary cybersecurity infrastructure and technology. They are also unable to respond quickly and appropriately to attacks and lack the capabilities to deal with new risks and threats. They are also more susceptible to new vulnerabilities and exploits, especially zero-day vulnerabilities.

Log4j, for example, was a zero day vulnerability that was being exploited by the wild and was discovered late 2021 by security researchers. Although a patch was released, it is possible that smaller companies didn't know about the vulnerability or how to mitigate it.

Every new zero-day vulnerability will make it difficult for SMBs. Follina, another zero day vulnerability, was discovered and is affecting Windows OS devices. Although the attack is sophisticated, it is not easy to reach a company. To attack an organization's network, a victim must simply open an Office document (or view it) to be able to access the attack.

Windows has released a patch. However, it is up to the company to update their systems. A company that doesn't have the proper patch management system may not be able to update all devices necessary to reduce or eliminate the vulnerability. Shadow IT can also occur when a company doesn't have the proper asset management or visibility process. Without knowing which systems are connected to your network, you won't be able to account for it's security. Security compromises can occur quickly if you don't know where your vulnerabilities are.

Hackers have been expanding their tactics and are now targeting SMBs. SMBs are being increasingly targeted by ransomware and phishing , as well as APT attacks . These companies are at risk and hackers are exploiting them.

How can cyber insurance help SMBs

Cyber insurance covers the costs of ransomware, data breaches and other cybersecurity incidents. This includes investigation, recovery and remediation.

SMBs can also get cyber insurance at a lower cost. Because the company's digital footprint is smaller, premiums are usually more affordable. You can insure less devices, employees and locations.

Due to the large advantage of insured companies, cyber insurance has become more difficult to obtain. This means that SMBs must improve their cybersecurity and comply with specific cybersecurity requirements in order to be eligible for cyber insurance.

These requirements aren’t very demanding. Instead, they help SMBs improve their cybersecurity posture. This could be part the procurement process for cyber insurance and therefore a priority in risk management. It may be easier to get approval from stakeholders and to allocate resources to this initiative. This makes it easier for SMBs to be secure and also ensures them in the event of a compromise.

Cyber insurance is a way to transfer the financial risk of security events to the insurer. This helps ensure the organization's longevity and makes it more capable of dealing with a cyber security event. Cyber insurance should be considered a critical asset that makes it easier for smaller companies to handle the worst-case scenario.

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