The looming threat of cyber hacking continues to cast a shadow over small businesses across not only Canada, but the entire world. Recently, a major cyber attack affected companies in the United States and some parts of Europe. Sites affected included social media moguls Twitter and Pinterest as well as the popular online streaming site Spotify. But the big players were not the only ones hit by the hack; a number of small businesses were affected as well. This article looks at the effects of cyber hacking on small businesses and ways to protect your business from this type of risk.
Cyber hacks are targeting small businesses
There is a large misconception among small business owners that cyber hackers are only interested in large corporations. The truth is that 43% of cyber attacks actually target small businesses. Small companies tend to be easier to hack because they lack the resources and protective barriers that larger ones have to fend off cyber hackers. On October 21, 2016, a massive hack put major sites including Twitter, Pinterest, Amazon, CNN, Reddit, Spotify and Airbnb in the dark throughout the United States and some parts of Europe. Unfortunately, small business retailer sites including Etsy and Shopify were also hit by the attack.
One small business owner, Heather Daniels, relies on Etsy to sell her products. Daniels told AdWeek that losing an entire day of business was “financially devastating”’ for her. Earlier this year, The Guardian reported on a small business based in Lancashire, England that was forced to pay a ransom in exchange to regain control of their company data from cyber hackers. Mark Hindle, the managing director, admitted to The Guardian that their company was completely unprepared for a cyber attack due to their lack of knowledge and awareness on this type of risk. This mentality isn’t uncommon in the small business world, but it can be extremely dangerous.
The Symantec 2016 Internet Security Threat Report indicates that the rise of cyber hacks shows no sign of slowing down. Some notable statistics from 2015 include:
- 429 million identities were exposed to theft
- 318 total security breaches were reported
- The overall rate of email spam was 53%
- Email phishing rate jumped to 1 in 1,846
- 48% of breaches were caused by data being accidentally exposed
- An unprecedented 54 zero-day vulnerabilities were found in 2015
- Anthem, the White House, the Pentagon, the German Bundestag and the US Government’s Office of Personnel Management were all victims of cyber attacks in 2015
How to protect your own business
To avoid becoming a cautionary tale, it’s important to protect your business from the threat of cyber attacks. Here are five easy ways to help safeguard your company.
- Password security: make sure your passwords are as unique and difficult to guess as possible. Also, update them on a regular and timely basis and avoid using the same one for multiple platforms.
- Update often: when the software or applications you rely on for your business are in need of an update, make sure you install those updates as quickly as possible. Many of them include security enhancements and bug fixes that could help defend you from cyber attacks.
- Actually read the terms and conditions: when installing or downloading things like software, apps or files, don’t be so quick to ignore the familiar terms and conditions pop-up. This will include details on what kind of access you’re giving to various parties on information including your location, phone number and client names.
- Be on the lookout for phishers: the percentage of spear-phishing campaigns that have targeted small businesses has skyrocketed from 18% in 2011 to 43% in 2015.
- Back everything up: while the main objective is to avoid cyber hacking, if your business does become a target, it’s important to always have a backup of all your files secured. You can use cloud sharing or an external hard drive to do this—better yet, why not both?
You simply never know what could happen in the digital world, so ensuring your business is protected and covered in the event of a loss is imperative. Beyond the financial ramifications, security and data breaches can severely impact your reputation with your clients and customers. More and more business owners are adapting to the increased threat of cyber hacks. A recent study done by the Council of Insurance Agents & Brokers found that nearly 40% of U.S. polled policyholders have recently increased their cyber liability coverage.
Talk to your broker today to determine what type of coverage you should be seeking for your small business and continue reading this blog to stay up to date on the importance of cyber security for your small business.
Northbridge General Insurance Corporation is the insurer of Northbridge Insurance policies.