Small businesses seem to have been lured into a false sense of security when it comes to data breaches. I have the opportunity to speak to many businesses about this topic and I hear the same thing repeated, “We are too small for anyone to want to Hack”.
The reality is the complete opposite. According to NetDiligence’s 2017 Cyber Claims Study, small businesses, companies with less than $50 million in revenue, accounted for 47% of the claims. In this same study, they identified the average total breach cost at $394,000.
Now, what small business can afford to absorb a $394,000 hit?
Let’s look at some more statistics. According to the Ponemon Institute 2018 Cost of a Data Breach Study, the mean time to identify a breach was 197 days. Your business could be breached right now at this moment and you don’t even know it.
The Ponemon Study predicted the probability of a company experiencing a Data Breach in the next 24 months was 27.9%. (South Africa had the highest probability at 43%. Germany had the lowest at 14.3%).
How much easier is it to compromise the security of a small company vs a large company? Large companies spend millions on their Cyber Security Systems and are still compromised regularly. What is the budget for smaller companies? They are what would be considered “low hanging fruit.”
Here are a few things that a company can do to help mitigate both the chance of having a Data Breach and minimizing the effect that the Breach has on the company.
First is to invest in a strong robust Cybersecurity Program. This includes software and training employees (the human factor is usually the weakest link in a Cybersecurity Program).
The second is to have a plan in place for when it happens. Ponemon shows that having an Incident Response Team and Employee Training for an event and significantly reduce the cost of a breach.
Third and final is to have a funding mechanism in place to help pay for the costs that will inevitably occur as a result of a Data Breach. The most efficient way to do this is to purchase a Cyber Liability Policy that is specifically tailored to your business.
Not all Cyber Policies are created equal, so an agent who is trained in the cyber liability coverage and in identifying the exposures your business faces is crucial.
Data Breaches are killing small businesses. Take the steps to make sure that yours is not one of them.
Contact us for more information.
IBM Security Services- The Cost of a Data Breach Study by the Ponemon Institute
NetDiligence- 2017 Cyber Claims Study