Cyber threats are rapidly evolving, placing small businesses across Canada, and around the world, at heightened risk. Many business owners still underestimate the impact of cyberattacks or assume they’re too small to be a target. According to Accenture’s Cybercrime study, 43 per cent of cyberattacks are aimed at small businesses, yet only 14 per cent are adequately prepared to defend against them. With growing reliance on cloud tools, remote access, and digital operations, small businesses often lack the advanced cybersecurity tools or dedicated IT teams of larger organizations, to detect, prevent, or recover from attacks.
Key cyber threats facing small businesses
Today’s cyber threat landscape is broader and more sophisticated than ever. From phishing attempts to AI-generated attacks and cloud vulnerabilities, here are the top risks you need to know, along with practical steps to help defend your business:
1) Cloud security vulnerabilities
As businesses increasingly rely on cloud services, misconfigurations and weak access controls can leave critical data exposed.
What you can do:
- Enforce multi-factor authentication (MFA) for all cloud services.
- Adopt zero-trust security framework to limit access and contain potential breaches.
- Regularly assess and audit vendor security practices to ensure compliance.
2) AI-powered social engineering attacks
Cybercriminals now use generative AI to create highly convincing phishing emails, deepfake voice scams, and personalized fraud that can deceive employees and bypass filters.
What you can do:
- Train staff to detect AI-driven social engineering techniques and educate employees to verify unusual requests through trusted channels.
- Use behavior-based detection tools and enable email authentication protocols like SPF, DKIM, and DMARC.
- Stay informed on emerging AI-based attack techniques and update your detection and prevention tools accordingly.
3) Supply chain attacks
Hackers may infiltrate your systems through third-party vendors or partners, using them as a backdoor to your data.
What you can do:
- Conduct regular risk assessments on vendors and suppliers.
- Require partners to meet minimum cybersecurity standards.
- Monitor integrations and set clear breach notification protocols.
4) Employee-related risks and human error
Even trusted employees can accidentally expose sensitive data or act with malicious intent. In fact, human error is a leading cause of cyber incidents.
What you can do:
- Implement least-privilege access controls and audit logs.
- Log user activity and set alerts for unusual behaviour.
- Conduct regular security awareness training and simulation exercises.
5) Remote work risks
Employees accessing company systems from home or unsecured personal devices can create vulnerabilities.
What you can do:
- Enforce the use of secure VPNs and endpoint protection.
- Use mobile device management (MDM) tools.
- Set clear remote work policies and password standards.
6) Ransomware
Malicious software can encrypt your data and hold it for ransom – without any guarantee of recovery.
What you can do:
- Back up critical data regularly and store backups offline.
- Install security patches promptly and use endpoint tools.
7) System disruptions an outages
Denial-of-service (DoS) attacks or IT misconfigurations can interrupt access to your systems and services.
What you can do:
- Work with your internet provider to set up traffic filtering.
- Use scalable infrastructure with built-in DDoS protection.
- Monitor network performances for early warning signs.
The business impact of a cyber incident
A cyberattack can lead to costly disruptions: lost revenue, damaged customer relationships, legal implications, and increased recovery expenses. You may also face regulatory requirements to notify affected customers, adding to the complexity and financial strain. For example, if an employee leaves a briefcase containing sensitive documents in a taxi or emails confidential files to the wrong person, that too could be classified as a data breach with real consequences.
What is cyber insurance and how can it help?
Some small business owners may think cyber insurance isn’t necessary or worth the cost. But even minor breaches can result in major losses. The financial consequences of a cyber breach can be serious – averaging $120,000 per incident for small and mid-sized businesses (SMBs) – a number that continues to rise. Cyber risk insurance helps protect small businesses by covering costs related to:
- Data recovery and breach response costs
- Business interruption and lost income
- Legal expenses and regulatory fines
- Public relations support to restore your brand reputation.
Protect your business with the right insurance
You 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. To learn more about protecting yourself and your business, visit our cyber risk insurance page today.
