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If you’re a small business owner, you might consider yourself a jack of all trades. You likely handle every aspect of your business, from bookkeeping to staffing, fixing things and meeting with clients. But did you expect to become a cybercop?
That’s also becoming an unfortunate part of the job. Cybercrooks often target small businesses over larger businesses because you have fewer resources and you’re already stretched thin. But that doesn’t mean you don’t have a few tools at your disposal to combat cyberattacks against your business.
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Cybercrooks Demand Big Stacks of Cash From Small Businesses
Cybercriminals are getting bold. The average ransom demand was $1.62 million in the first half of 2023, a 74% increase over the past year, according to Coalition, a company that sells risk management and cyber insurance to businesses. Ransomware claims between January 1 and June 30, 2023, increased by 27% compared to the previous six months, a record high.
Ransomware is designed to encrypt files on your device, making its files and systems unusable. A cybercriminal will demand a ransom payment in exchange for the decryption. They’ll also threaten to release sensitive data in exchange for ransom.
But ransomware is hardly the only scam in the cybercrook’s playbook. The average transfer funds fraud in the first half of 2023 was $297,000, according to Coalition’s report. Funds transfer fraud is when a hacker redirects money from your account before or during a money transfer to their account. Funds transfer fraud increased by 15% in the first half of 2023 compared to the second half of 2022.
With higher ransom demands and an increased risk of cyberattacks, a small business insurance policy with cyber liability insurance can be vital. It covers costs like data recovery, investigative services, legal costs and ransom payments if you’re a victim of a cyberattack.
Uncle Sam Wants You to Report Cybercrime
Small businesses are attractive targets for cybercriminals because they have information bad actors and foreign governments want, according to the U.S. Small Business Administration (SBA). But small businesses typically lack the resources to protect digital systems for accessing, disseminating and storing data.
Many small businesses fail to report cyberattacks for reasons, such as concerns about publicity and potential harm to the company’s reputation or profits, according to a report from the U.S. Department of Justice Cyber Digital Task Force. Lack of reporting can impede the department’s efforts to thwart cybercriminals and address threats to national security.
Help is on the way: In December 2022, President Biden signed the Small Business Cyber Training Act of 2022, which requires the SBA to establish a training program for employees of small business development centers to help small businesses with cybersecurity planning.
Content Creators and Influencers Need a Good (Insurance) Agent
Nearly one in five (19%) social media users consider themselves to be content creators (10%) or influencers (9%), according to a report from the Mintel Group, a market intelligence agency. More than three-quarters (76%) of influencers say they make enough money from advertising and content creation to support themselves. Clicks, likes and followers are great for business, but it could also attract unwanted attention.
“In cases where they (influencers and content creators) have a strong audience following, they have a greater exposure when compared to others who may not be well known,” says David Derigiotis, chief insurance officer of Embroker.
One risk is social media identity theft, also known as social media impersonation. That’s when a cybercriminal uses your pictures and information to create fake social media profiles for malicious purposes, such as defrauding people out of money, using your account to spread malware and stealing personal information.
Content creators and influencers need to protect their business from problems like cyberthreats. Cyber liability insurance is worth a look. Another good option is media liability insurance, which covers problems like defamation, privacy invasion, intellectual property infringement and inaccurate claims about a brand or product.
Small Businesses Want Insurers to Get With the Times
Just because cybercriminals are stepping up their efforts doesn’t mean small businesses want insurance companies to go back to the dark ages of communicating via telephones and fax machines. Many business owners want their small business insurance company to communicate with them via social media.
“Small businesses want to remain connected with their commercial insurer and they find social media a convenient way to do that,” says Stephen Crewdson, senior director of global insurance at J.D. Power. Crewdson adds that customers who follow their insurers on social media have a higher level of customer satisfaction.
The top topics of interest on social media among small businesses include new product information (52%), general insurance news (51%) and tips for reducing cost (49%), according to a report from J.D. Power.
How to Find the Best Small Business Insurance
Cybercrooks are just one of many reasons why small business owners need solid business insurance. Other common problems that small business owners face include theft of business property, accidental injuries to others and workplace injuries. Here’s how to find the best small business insurance.
- Determine what coverage types you need. A business owners policy (BOP) is a great place to start. It bundles general liability insurance, commercial property insurance and business income insurance. You can add other insurance types to your BOP, like commercial auto insurance and workers compensation insurance.
- Have your business information handy. Once you determine what business insurance types you need, make sure you gather information about your business to get accurate quotes. This includes information like your industry type, business location, business partners, annual revenue, number of employees, annual payroll and business equipment like tools, materials and computers.
- Compare business insurance quotes. The best way to find cheap business insurance is to compare quotes from multiple insurance companies. The median cost of a BOP is $636 per year, according to Insureon. But your business insurance costs will depend on factors like where your business is located and your industry type.