How & why small businesses are targeted by cybercriminals
Experts reveal how these businesses are targeted, why they underappreciate the threat and ways to mitigate these risks.
While a cyberattack might not be top of mind for owners of the local pizza shop, florist or auto mechanic, they should be as cybercriminals have embraced a shotgun approach to choosing victims.
“They (cybercriminals) are buying big dumps of user IDs, emails and passwords,” explains Bob Wice, head of underwriting management, cyber & tech at Beazley. From there, digital crooks simply blast out massive campaigns in hopes of contacting a rube.
“If the wrong attachment is clicked on, that gives them access to the system,” Wice tells PropertyCasualty360.com. “A lot of it comes down to security awareness and the human element. You can have the resources to build deep security, but the weakest link — the human element — will always be present.”
Despite this, many small business owners feel the scale of their operation is enough to keep them off the radar of cybercriminals. Quite conversely, this posture actually makes them more susceptible to cyberattacks due to a lack of protection, according to Parth Shukla, group manager of Intuit, Inc.’s QuickBooks Insurance.
“In fact, 58% of cyber losses targeted small- to midsize businesses in 2020 and 80% of victims are attacked a second time, according to the cybersecurity firm Cybereason. Small businesses should not feel immune to cyberattacks,” Shukla says.
Some 60% of small businesses that do have a cyberattack fail in the pursuing six months, making the situation all the more dire, according to the National Cyber Security Alliance.
PC360: What makes small businesses attractive targets for cybercriminals?
Shukla: There are a substantial number of small businesses that are not insured against automated cybercrimes such as phishing campaigns and ransomware attacks, therefore, lacking the resources to prevent, identify, respond to and recover from threats. Many have also made changes to their business practices due to the pandemic, which can leave some small businesses even more vulnerable. Additionally, it’s important to note that cyberattacks are not covered by general liability insurance, all of which makes it much easier for cybercriminals to take advantage of small and midsize businesses.
PC360: What types of attacks target small businesses most commonly?
Shukla: Small businesses are prone to all kinds of cyberattacks, which include but are not limited to malware, ransomware and data breaches as well as having privacy, security, and operational risk. These kinds of attacks may result in stolen funds, compromised confidential business information and unauthorized hacks into day-to-day business operations.
Most notably, 50-70% of ransomware attacks are aimed at small and medium-size companies, which involves cybercriminals using malware to take over and encrypt a victim’s files and data, holding the data hostage until they’re paid to release it. Especially with the new age of remote work becoming more common now than ever, this allows more opportunity for hackers to take advantage of out-of-date VPNs and unsecured home networks.
PC360: What can these businesses do to protect themselves from cyber risks?
Shukla: They should begin by investing in cyber insurance, which not only defends against privacy, security and operational risks, but also helps cover legal fees and expenses. Additionally, cyber insurance can also provide many other means of protection, including tasks such as IT forensics, negotiation and payment of a ransomware demand, recovering compromised data, notifying customers of a data breach, public relations expertise, credit monitoring and identity restoration, as well as aiding in losses that arise from security failures and system failures.
In addition to having cyber insurance in place, businesses would also benefit from having a plan of action in the event that a cyberattack does occur, which would include notifying employees and clients and knowing where all system backups are located. To prepare for this, simulating a cyberattack would help business owners and employees know what to do in case of a real event.
PC360: How are cyber insurance policies helping small businesses recover after an incident?
Shukla: Companies such as Coalition, a cyber insurance provider and partner with Intuit QuickBooks, help restore as much as they can for companies impacted by cyberattacks. Any attack resulting in stolen funds, reputational harm, security breaches and much more will be covered by cyber insurance providers so that business owners can reset and get back to their operations as quickly as possible, leaving no financial or security concerns or stresses.
PC360: With risks in this sector continually growing and changing, how vital are cyber plans to a modern business?
Shukla: As technology continues to evolve, the risk for cyberattacks becomes more extensive and complex, therefore it is crucial for business owners to look into the strongest and most protective cyber insurance plans. Small business owners should not feel that they are immune to attacks due to their small size, because cyberattacks can happen to businesses of all sizes. Additionally, business owners should also ensure that their insurance plans are up to date and cover all potential cyberattacks, especially as they become more prevalent.
Editor’s Note: This article is part of a series for ALM’s Small Business Guidance program, providing insights and information for small and medium-sized companies.
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