News and Articles
October 1, 2023
While cybercrime has long been a risk for enterprises of all sizes, the threat of data breaches, ransomware attacks, and outright theft have increased dramatically in recent years. Smaller and mid-sized businesses may not have unlimited resources with which to protect against cyber criminals. Nevertheless, risk management strategies are available to deal with these looming threats – and these strategies work in concert with cyber insurance solutions.
This article explores cost-effective strategies to mitigate the financial and reputational damages associated with cybercrimes.
To learn more about cyber insurance solutions, visit our U.S. Risk Brokers page.
How Bad is the Cybercrime Threat?
Highly-publicized incidents of data breaches and cyber attacks have brought attention to the growing problem of criminal activity. The COVID-19 pandemic and economic conditions following the pandemic have only sharpened cyber attacks, particularly for enterprise operations in healthcare, supply chain, and financial services businesses.
According to a study published by Data Science Central, losses associated with cybercrimes exceeded $4.2 billion the U.S. alone in 2020. The increased demand for digital services during the pandemic prompted a rapid digital transformation, often compromising security protocols and exposing vulnerabilities in organizations, especially small and medium-sized enterprises (SMEs) with less mature cybersecurity measures.
Cybercriminals have enhanced their strategies, leveraging advanced methods like sophisticated ransomware and exploiting fear and uncertainty around COVID-19 to conduct themed attacks, phishing, and frauds.
The rise in cryptocurrency popularity has also opened new avenues for financial crimes and frauds, as state-backed actors engage in cyber espionage targeting research institutions and companies involved in COVID-19 research. Attacks on supply chains aim to exploit interconnected networks, impacting operational resilience and data integrity.
Experts in cyber security indicate that the problem continues to grow; it is estimated that the global losses from cybercrimes will surpass $10.5 trillion by 2025.
Cost-Effective Cyber Risk Solutions
Smaller businesses are not helpless when it comes to protecting sensitive data from theft, loss, or unauthorized access. In fact, there exist numerous risk management solutions that can be implemented without steep expenses. Some of the most cost-effective solutions include:
- Educate Employees: Train employees regularly on recognizing cyber threats like phishing and implement awareness programs.
- Enforce Strong Passwords: Mandate the use of strong, unique passwords and employ multi-factor authentication wherever possible.
- Keep Systems Updated: Regularly update all software, firmware, and operating systems, and automate updates where possible.
- Utilize Firewalls and Anti-Malware: Install reliable firewalls and anti-malware software to safeguard against malicious attacks.
- Secure Wi-Fi Networks: Use advanced encryption for Wi-Fi, and disable SSID broadcast to make networks less visible.
- Backup Data Regularly: Schedule routine data backups and test them periodically to ensure data integrity.
- Restrict User Access: Limit access rights to essential personnel only and control access to sensitive information.
- Manage Vendor Risks: Evaluate and monitor third-party vendors’ security and opt for secure payment processors.
- Use Secure VPN and Browsers: Implement VPNs for remote work and encourage the use of secure, updated web browsers.
- Conduct Regular Security Audits: Perform regular security reviews and vulnerability assessments to identify potential weaknesses.
- Implement Mobile Device Management: Secure company-owned devices using mobile device management solutions.
- Enhance Email Security: Employ email filtering and encryption to block spam and protect sensitive information in transit.
- Maintain Legal Compliance: Adhere to relevant data protection laws to avoid legal repercussions.
Whether your company uses in-house risk management solutions or hires third-party IT services to protect sensitive systems and data, it is imperative that the risks cybercrimes represent are taken seriously. Failure to implement a top-down cyber security policy can result in significant financial losses, not to mention the reputational harm left in the wake of a data loss or theft.
How Can Cyber Insurance Help?
Cyber insurance provides a financial backstop against losses. Policies can be tailored to the unique needs and risks of small- to mid-sized enterprises and may include coverages for a range of expenses and liabilities, such as the costs related to data breach notifications, public relations efforts to mitigate reputational damage, legal fees arising from regulatory fines and lawsuits, and expenses related to data recovery and system repairs.
Additionally, cyber insurance often covers the costs of business interruption due to a cyber incident and may include provisions for extortion payments, such as those related to ransomware attacks. Business owners should seek advice from qualified cyber insurance providers to determine coverage types, terms, and limits. ◼
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