One in three small businesses surveyed said they would not know how to respond to a ransomeware attack
With the huge and abrupt shift to remote work during the COVID-19 pandemic, cybercriminals have wasted no time in trying to take advantage of the opportunity this affords them. While many companies have extensive IT security for workers in the office, the patchwork of networks and work stations that have been created from workers’ homes during the COVID-19 pandemic has quickly lured cyber-criminals into action. In particular, as the rise in emails and notices from officials has risen so to has an increase in phishing scams and fake websites infected with malware.
According to Google, as of April 16, 2020, the company has blocked more than 100 million phishing emails and more than 18 million malware and phishing emails daily in relation to COVID-19. This number is in addition to the more than 240 million COVID-related spam messages sent out to emails daily. With these statistics in mind, a new Cyber Risk Report from The Hanover says that while the majority of businesses are insured against traditional cyber risks, such as breaches of personal information, there were many gaps in coverage for emerging cyber risks such as malware and ransomware.
“Having the appropriate cyber protection will only become more important as new technologies emerge, businesses become more connected and cyber criminals develop more sophisticated methods,” said Bryan J. Salvatore, president of specialty insurance at The Hanover. “As businesses grow in complexity, the advice of an independent agent becomes increasingly important in helping business owners understand the many risks they may face and mitigate those evolving threats.”
Cyberattacks hit a business’ profitability hard and fast
Some of the most sobering statistics from the study were that nearly 90% of respondents to the survey had reported experiencing a cyberattack during the past year, but that one in three small businesses would not know how to respond to a ransomware attack.
Other key findings from the study included the following:
- The top cyber security fear for businesses was breach of personally identifiable information, however, malware-related attacks were the most commonly experienced attack. One in two businesses experienced a malware-related attack in the last year while fewer than one in five businesses experienced a breach of personal information
- 60% of businesses reported they would be unprofitable in less than two days if they lost access to critical systems or data. And, 92% reported they would experience a negative financial impact
- Over 40% of businesses had no cyber insurance or limits of $1 million or less, which may not adequately cover the cost of the average cyberattack
- Only 11% of businesses were concerned about cyberattacks threatening their supply chains, yet, 88% reported being dependent on third parties
The study also affirmed the important role independent insurance agents can play as experienced advisers, offering risk management counsel and services to help small to mid-sized business owners protect their operations and maximize the benefits of their cyber insurance programs
Independent insurance agents play an important role in helping businesses obtain the right coverage
The Hanover study, which was conducted in collaboration with Zogby Analytics, found that more than 70% of business decision-makers surveyed had reported purchasing a policy on the recommendation of an independent insurance agent. Overall, The Hanover says it affirms the important role independent agents play as “experienced trusted advisors” to small to mid-sized business owners who are looking to devise a comprehensive cyber insurance program.
How to access the complete study
The full study can be accessed on The Hanover website here.
