It is well known that small and medium businesses (SMBs) face an ever-increasing risk of cyber attacks. Sixty-three percent of SMBs, surveyed in fall 2019—prior to COVID-19 lockdowns—reported they had experienced a cyber breach in the last 12 months, according to Ponemon (“The 2019 Global State of Cybersecurity in Small and Medium-Sized Businesses“).
Executive Summary
Now more than ever is the time to empower SMBs to better understand cyber threats and stay protected with the right cyber coverage, writes Sayata Labs CEO Asaf Lifshitz, who argues that the right coverage is delivered through standalone cyber policies. Here, he urges agents and brokers to do their part to educate insureds about cyber threats, the potential shortcomings of CGL coverage and the real solutions available to them today through standalone cyber insurance policies that come with support services like preventative planning and breach response.The damage from an attack can be a crippling blow to a small business. The average cost of a breach to an SMB is $175,000, to say nothing of the business interruption and potential harm to the company’s reputation (NetDiligence Cyber Claims Study: 2020 Report).
Further, as compared to larger companies that come equipped with dedicated security teams and large IT budgets, SMBs are often not fully prepared to withstand a cyber assault.
This year, COVID-19 came with its own share of cyber exposures. Remote work became a major security consideration stemming from the COVID-19 pandemic. The rise in compromised remote desktop protocols (RDPs), leaked credentials, IoT credential stuffing and more attacks in general are all reflected in the 400 percent spike in cyber attacks reported by the FBI in the early days of lockdowns in April 2020. Further, home WiFis are not as secure as workplace protocols, driving up the average total cost of a breach by $137,000 in 2020, according to Ponemon.
