Businesses, regardless of size, are becoming increasingly dependent on technology. While this offers numerous benefits, it can also bring potential vulnerabilities and risks. The threat of cyberattacks is growing for firms that store sensitive data ranging from credit card details to customer email addresses.
A report by the Canadian Federation of Independent Business (CFIB) in 2022 revealed that nearly 45% of small businesses reported a cyberattack. While 11% of businesses fell victim to whaling attempts, a sophisticated phishing tactic targeting top-tier executives like CEOs. This shows the lengths cybercriminals will go to breach a company’s defences. The professional services sector is especially at risk, with 57% facing at least one cyberattack. Amidst these threats, only 11% of businesses mandated cybersecurity training for their employees.
Many companies, despite being highly vulnerable, are lulled into a false sense of security, believing cyber threats only concern major corporations. A study from Northbridge Insurance, in association with Leger Research, demonstrates this trend. The study spanned three years and surveyed 800 Canadian organizations from diverse sectors. They found that businesses were becoming progressively complacent with cyber threats. While cyber incidents, including frauds and scams, cost Canadians over $530 million in 2022. This illustrates the importance of being prepared, understanding the risks, and getting comprehensive cyber insurance.
Is your business safe?
It’s a misconception that only large businesses are at risk. Companies of any size can face cyber threats if they maintain a digital footprint, manage transactions, or store customer data. Here are a few reasons why businesses can be at risk:
Inadequate cyber defence
Due to budget constraints or limited awareness, some companies lack robust cyber defence mechanisms such as two-factor authentication or advanced firewalls. These businesses might not prioritize state-of-the-art security systems, leading to gaps or outdated protection protocols. These vulnerabilities can become potential targets for hackers.
Access to larger networks
Businesses often maintain several digital connections through various operations—be it communications, transactions, or data storage. These connections can often link business systems to larger networks of partners, vendors, or clients. If a company’s cybersecurity measures are weak or inadequate, hackers can leverage the credentials, relationships, and data to launch attacks or gain entry into these larger or more secure networks.
Economic impact
A cyber incident can wreak havoc on a company, not only through direct monetary losses from fraud, ransom payments, or theft but also through substantial indirect expenses. These can range from hiring cybersecurity experts, customer compensations, and investments in enhancing security measures post-incident.
Reputational fallout
Trust is the bedrock of any business, particularly for companies that thrive on close-knit customer relationships and word-of-mouth referrals. A single cyber incident can fracture this trust, leading to a ripple effect. News of a breach can quickly spread across social media and online platforms, amplifying the incident’s impact. This not only results in an immediate loss of customer confidence but can also diminish business opportunities.
A glimpse into cyber threats
Cyber criminals use a variety of methods to steal information:
Phishing scams use deceptive emails to lure individuals into harmful actions, such as providing passwords or other sensitive information.
Ransomware attacks involve encrypting data and demanding payment for its release, but there’s no guarantee of data being returned after a payment.
Denial-of-Service (DoS) attacks cripple networks by flooding them with excessive traffic, making them inaccessible.
It’s essential to remember that not all vulnerabilities are digital; simple human oversights, such as misplacing confidential documents, can compromise data integrity.
Benefits of cyber insurance
Robust defence against cyber threats
With a surge in cyberattacks, the need for cyber risk and data breach coverage is more important than ever. Cyber insurance doesn’t just act as a safety net after an attack; it serves as a deterrent by supporting businesses in implementing better cybersecurity practices. Plus, cyber insurance can help with costs that come after breaches and hacks take place, such as money for damage control, system repair, and customer outreach.
Financial safeguard
The financial implications of a cyberattack can be devastating. Beyond the immediate costs of rectifying the breach, this can include PR campaigns to restore reputation, and even credit monitoring services for affected clients. Cyber insurance can help provide a financial buffer, ensuring that a cyberattack doesn’t translate into a crippling setback. It’s not just about compensating for losses; it’s about ensuring the business’s continuity and stability.
Staying one step ahead with cyber insurance
Whether it’s a ransomware attack, data theft, or data breaches, Northbridge recognizes cybersecurity threats come in different forms. Our cyber insurance coverage encompasses preemptive cybersecurity strategies to responsive action after a breach, ensuring businesses are fortified at all stages. With access to several resources, including encryption best practices and breach response templates, Northbridge empowers companies in their digital journey by providing a holistic suite of services designed to both help prevent threats and address them when they arise.
Prioritize your cyber defence today, and visit our cyber risk page to learn more.
