According to recent reported research by the Federation of Small Businesses, only 10% of small businesses and self-employed individuals have cyber insurance. Of those, 38% do not understand their policies, or know what they include. This ties in with further parts of the report that states (again from the FSB’s data) that few small businesses have access to the resources, guidance and tools needed to enable them to understand the level of cyber risk to which they are exposed. In addition, they are unsure as to how to mitigate against the increasing threat of cybercrime. The stark reality of the potential impact of a cyber-attack on small business is reflected in a report by Made in Britain, that states that 60% of small companies go out of business within six months of a cyber-attack. The financial impact of these attacks coming primarily from salvaging damaged assets, paying financial penalties, and bearing the brunt of business down time.
The increasing focus from cyber criminals on SMBs is driven by a lack of awareness and preparedness on the part of these organisations. Smaller businesses are also increasingly being targeting as part of wider co-ordinated supply chain attacks. For a hacker, these types of organisations are good targets for an attack. Whilst the potential bounty from a smaller business is less, the pool of targets is larger, with there being over 25 million SMBs in Europe alone. The direct financial impact of a single attack on a small business is reported at £65,000. This is often sufficient to push a business over the edge, with the majority of victims not able to survive 6 months after an attack.
There is an urgent need to support SMBs in being more cyber ready, through clear information, easy to implement controls and effective monitoring. If a small business can understand the risk, mitigate as best they can through the base controls they have in place, insurance can form an important back stop, helping to ensure a business’ survival in the event of an attack. Both insurers and SMBs need to work together to better understand the risks and the cover required. This will enable underwriters to better price policies at more affordable levels for this large market segment.
The Arx Alliance platform speaks directly to these issues. To find out more please visit www.arxall.io or contact me directly through LinkedIn