It’s easy to get cyber-fatigue nowadays. The headlines scream hyperbole every day, the plotlines of major TV dramas paint apocalyptic scenes, and your insurance broker is calling with cyber loss statistics every month.
So what? You’re a small business, and therefore you’re under the radar, right? Wrong. According to Bob Holley, the FBI’s Special Agent in Charge of the Chicago division, small or medium-sized enterprises (SME) should be afraid – very afraid.
A staggering 60 percent of the 79,000 security incidents in Chicago in 2014 and 2,200 reported company breaches targeted SMEs, Holley told the 250-strong audience at Advisen’s Cyber Risk Insights Conference this week (May 18).
“Threat is not too harsh a word for it,” Holley said of cyber. “It is not a ‘nuisance’ or a ‘problem’ for SMEs to deal with later. Cyber is a persistent and rapidly evolving threat that needs to be faced head-on.”
Holley said that many people have trouble visualizing the threat. “They can’t touch it, and so have a hard time understanding its significance,” he said.
The FBI agent called for SMEs to develop relationships with law enforcement so that when an event occurs, you can call them early and get them involved in mitigation.
The Advisen conference audience also heard from a number of insurance professionals, who argued that SMEs have the same exposures as large companies, and could benefit more from insurance services than their larger counterparts.
The panel said that many SMEs are vulnerable to liabilities from outsourcing services, providing services to third parties via contract (such as document storage) and by holding increasing amounts of data. Not to forget the old faithful – lost or stolen laptops and human error causing technical vulnerabilities.
And when a cyber event happens, SMEs often don’t have the resources to cope. Smaller companies often don’t have breach response plans and law and PR firms on retainers – many don’t even have full-time IT staff. If a cyber crisis hits, they’re at the mercy of the hackers and the press – both of which could bring their business crashing down around their ears.
Insurance companies often provide the crucial services needed for a swift, effective crisis response – acting as the SME’s right arm in the event of a crisis. And – here’s the secret – insurance carriers are clamoring for SMEs’ business. You can get much better pricing than you think.
Rebecca Bole is EVP & Editor-in-Chief at Advisen. She has nearly 20 years of experience in the international insurance markets, both as an underwriter and a journalist. Contact Rebecca at [email protected].
