A Guide to Cybersecurity Best Practices and Insurance Coverage for Small to Medium Businesses

A security breach can devastate #smallmediumbusinesses (SMBs), as 60% of affected companies are out of business within six months of a cybersecurity attack (National Cyber Security Alliance). Cybersecurity for small to medium companies, defined as organizations with under $2 billion in annual revenue, is paramount! #SMBs are considered lucrative targets for cybercriminals who perceive them as less well-defended than larger companies.

With #cybercrime costs predicted to hit nearly $8 trillion in 2023 and a staggering $10.5 trillion in 2025 (Forbes), implementing robust cybersecurity best practices and electing the best insurance coverage option is imperative to protect your business.?

Our recent webinar for SMBs explores ways to protect companies before a ransomware or #phishing attack occurs. This article discusses key takeaways from this informative session and best practices to fortify your security posture.

The Current Cyber Threat Landscape

#Ransomware remains a top concern, with phishing emails being the leading cause of attacks, accounting for 36% of ransomware incidents. SMBs with fewer than 100 employees are frequently hit the hardest, constituting 70% of ransomware claims in the first quarter of 2023. Professional services, the public sector, consumer services and the healthcare sector were among the most targeted industries in this same period.

Worse, criminals now have the advantage of using artificial intelligence (#AI ) to create a new era of #cyberthreats . These criminals leverage AI to craft convincing emails that can easily pass as human communication, thereby increasing the success rate of their attacks. Moreover, AI can automate breach methods and even generate malware, significantly expediting the process.

Notably, according to NetDilligence's 2022 Claims Report and Kroll IR Spotlight Trends Report, SMBs submitted a staggering 98% of cyber claims between 2017 and 2021, representing 49% of the total cost for that time period.

The average cost of a breach is nearly $4 million, underscoring the financial implications and importance of securing protections and insurance for a business.

Assessing Risk for Comprehensive Insurance Coverage

Like other business insurances, cybersecurity insurance is critical to protect your most valuable assets against #cyberattacks . Your cybersecurity posture is key to determining your company’s cyber liability coverages and premiums.?

These factors include:

1. Firewall and Antivirus Management: A company's firewall and antivirus solutions and who manages these solutions help insurers understand the current level of protection a business has against common cyber threats.
2. Device Patching: Describing how devices are patched demonstrates a company's commitment to maintaining up-to-date software, which is crucial for addressing vulnerabilities.
3. Endpoint Detection and Response (EDR):? Having EDR in place speaks to an organization’s ability to detect and respond to advanced threats.
4. Penetration Testing and Vulnerability Scans: Sharing the latest results of pen tests and vulnerability scans offers insight into a company's proactive approach to cybersecurity.

These elements guide an insurance provider to the best available SMB coverage. In addition to the factors above, cyber rating factors for liability coverage encompass the following aspects, including:

• Class of Business: Different industries handle varying levels of sensitive information, with healthcare being particularly high-risk due to the confidential data they manage.
• Revenue Size: The scale of operations can impact the potential significance of a cyber incident.
• Location: Geographical factors may influence the likelihood of specific cyber threats.
• Website Scans: Regular scans of a company's website can reveal vulnerabilities and security gaps.
• Internal Controls: Employing multi-factor authentication (MFA), endpoint detection and response (EDR), regimented backup policies and email filtering contribute to better cyber defenses.
• Claims History: Previous incidents and claims can affect a company's coverage options.

It's important to note that not all policies are the same, and tailoring coverage to your specific risk profile is crucial. However, there are a few essential cyber coverage areas for SMBs.

These include:

1. Business Interruption: Coverage for financial losses caused by cyber events leading to computer system degradation, with time retention requirements.
2. Dependent Business Interruption: Protection against financial losses from outages experienced by third-party providers or partners.
3. Ransomware: Coverage for expenses related to responding to ransomware attacks, including forensic investigation, negotiation, and ransom payments.
4. Cyber Crime: Coverage for theft of funds resulting from security failures.
5. Social Engineering and Invoice Manipulation: Coverage for theft of funds through deception, impersonation, or fraudulent invoices.

While all cyber attacks present risks, ransomware has emerged as a prominent threat, with claims increasing by 77% in the first quarter of 2023 compared to the last quarter of 2022 (CoveWare Quarterly Report).?

Mitigating Risks and Nurturing Cyber Resilience

In today’s digital landscape, where cyber threats are relentless and increasingly sophisticated, safeguarding SMBs demands proactive measures. Understanding the intricate web of cyber insurance, adopting best practices, and staying informed about the latest statistics are pivotal steps toward a robust cybersecurity posture.?

To protect a business from cyber threats, consider the following strategies:

1. Employee Education and Testing: Regularly educate employees about cybersecurity best practices and simulate phishing attacks to enhance their awareness.
2. Continuous Monitoring and Vulnerability Alerts: Employ proactive systems monitoring and alerts to identify and address vulnerabilities swiftly.
3. AI and Next-Gen Tools: Embrace advanced tools like Machine Learning and NextGen SIEM (MXDR) to affordably and efficiently bolster your security posture.

By mitigating risks with a qualified service provider like Xtel, promoting #cybersecurityawarenesstraining among the workforce, and investing in comprehensive insurance coverage, small and medium business owners can confidently navigate the evolving threat landscape and protect themselves from potentially devastating cyber incidents.?

For more information about Xtel's #cybersecurity solutions, visit www.xtel.net.

?? Watch the entire webinar for more insights!