The business landscape has changed dramatically, we now operate in an increasingly digital world. 90% of Irish adults own a smart phone with 42% of adults using that phone to shop online. Interestingly, 87% of adults access their email through their smart phone.
For business owners, this means that communicating with and selling to your ideal customer has never been easier. The reality for many business owners, however, is the challenge of navigating lots of different digital tools. Upskilling staff to use those tools and trying to keep the data within those tools safe from competitors and from cyber criminals. As a result, cyber security has now become an essential requirement to your business operations. However, the term ‘cyber security’ is incredibly broad and unfortunately, open to interpretation.
At ITUS Protect we understand the set of unique circumstances that a small business owner faces – with small-business owners pulled in many directions and responsible for all aspects of their business including cyber risk. IT budgets are usually allocated to operational technologies such as Customer Relationship Management (CRMs) systems and bookkeeping solutions. Business owners are continuously looking at operational improvements, with many opting to avail of highly technical and educated staff available through partnerships with Managed Service Providers (MSPs).
75% of SMEs in the UK have stated that they rely heavily on MSPs for IT operations with 56% of SMEs believing MSPs offer an improved cybersecurity solution to their inhouse teams. A well-managed relationship between a business owner and their MSP can be highly beneficial to both parties (Check out our top tips for managing your MSP relationship here*link to other MSP blog ‘Understanding Shared Risk and Responsibilities in the MSP Landscape’), however, an MSP (just like an internal security team) will only be able to reduce cyber risk, and not completely omit it. Residual risk will always remain, and business owners should reflect on the impact of a technology failure or cyber-attack would have on their business.
Technology failures such as a server corruption or loss of internet service could prevent your business from meeting your customers' needs whereas a cyber-attach could lead to weeks of downtime, significant financial loss, reputational damage and regulatory fines. These financial losses can be mitigated through cyber insurance policies.
In this blog we’ll explore the reasons your business needs cyber insurance and why it’s becoming a priority insurance cover for many SMEs. Cyber Insurance was at one time a product for large, enterprise organisation with big security budgets available. However, in more recent times, the market has shifted, with insurance providers offering a range of cyber specific products (with pricing to match) for the SME sector. In simple terms, cyber insurance is a safety net. It provides coverage in the event of a cyber-attack, data breach or technology failure. Let's delve deeper into why it's so critical for SMEs and what it means for your business, and most importantly how cyber insurance can help.
The Rising Threat of Cyber Attacks
Year on year, the number of successful cyber-attacks are increasing, and no business is immune. From small family businesses to multinational corporations, everyone is a potential target. There is a common misconception amongst business owners that cybercriminals are simply not interested in them. Yet cybercrime is indiscriminate. Any business holding any type of data is a potential target- it's simply a game of numbers. It’s easy to think that cybercriminals are individuals targeting one organisation at a time. In reality, cybercrime has also gone through a digital transformation process, adopting AI and automation to help reach millions of targets with very little effort. When we combine this fact with our reliance on interconnected devices and digital workflows, it’s easy to understand why cybercriminals still have the upper hand.
SME News reported that one in four UK SMEs has been targeted by ransomware within the past year, with almost half (47%) of those falling victim having paid the ransom to regain access to their files or systems. Opting to pay a ransom request is not a simple solution. Law enforcement agencies advise against this as the proceeds are often linked to funding terrorism. Additionally, there is no guarantee that paying the ransom will release your data or reinstate your systems. If these issues could be resolved, many businesses simply will not have access to the level of cash needed to pay the ransom. Put simply, this means that businesses need to have the technical and financial resources available to deal with the data breach or cyber-attack. This is where having cyber insurance in place becomes essential.
How Cyber Insurance Helps Mitigate Risk
Cyber insurance is a proactive way to address these concerns and issues head on. While there are a variety of cyber policies that you can avail of, most have these common elements outlined below included.
Coverage typically includes:
- Incident Response: Covers the costs of hiring cybersecurity professionals to respond to a breach and determine its extent and impact. Most insurers will have an available database of pre-verified cyber professionals making finding an incident response partner quick and easy. This is particularly important as time is critical in the initial stages of any attack.
- Business Interruption: Helps cover lost income and related costs if your business cannot operate due to a cyber event. Standard business insurance policies usually exclude cyber related incidents.
- Legal and Regulatory Costs: Helps cover costs related to any legal action you might face due to a breach, such as investigations, fines, and lawsuits.
- Notification and Credit Monitoring: Helps with the cost of notifying affected customers and provides credit monitoring services if necessary. In addition, many policies will offer PR services, helping to lessen the impact on your company’s reputation.
- Ransomware: In cases where a cyber-criminal locks your network and demands a ransom, some policies may cover the cost of payment and expert negotiation services.
Cyber insurance is an essential part of a comprehensive risk management strategy. It can't prevent cyber threats, but it can significantly mitigate the financial risks, giving you peace of mind and room to focus on what you do best — running your business.
Marry Cyber Insurance with Good Cybersecurity Practices
It's crucial to note that having cyber insurance doesn't negate the need for robust cybersecurity measures. SMEs must invest in cybersecurity infrastructure, training, and practices to avoid falling victim to cyber threats. Cyber insurance should be seen as a component of a holistic cybersecurity approach—part of the plan, not the entire plan. Risk planning, mitigating and taking accountability is essential to ensure your business is fully protected and prepared for cyber security challenges.
How We Can Help Protect Your Business
At ITUS Protect, we understand the unique challenges faced by SMEs and the necessity for an easy to understand and reliable solution for managing cyber risk. Our suite of cybersecurity services is designed to help you navigate the digital landscape with confidence. We can help you have a personalised understanding of your company cyber risk posture so that you can allocation budget to have the biggest impact. We will work with you to create a true reflection of the cyber threats and vulnerabilities within your organisation and develop a clear picture of your IT infrastructure, which will equip you against this continuous threat.
In conclusion, cyber insurance for SMEs is a non-negotiable in today’s digital world. As the cyber landscape continues to evolve and grow, so too should your defences. By coupling cyber insurance with strong cybersecurity measures, you're not just protecting your business—you're securing its future.
Try our cyber risk management tool, ITUS Protect. ITUS Protect provides a single platform where business owners can see how effective their security solutions are while their MSP has simultaneous access to support remediation of threats and vulnerabilities. Get in touch with us today and secure your free trial by clicking this link.
