Being victimized by cyber criminals even once can be detrimental for SMEs. Statistics cited by CNBC indicate that 43% of online attacks are directed at small businesses, with only 14% having the necessary precautions. Furthermore, data breaches or hacks cost an average of $200,000 regardless of the size of the business. According to experts at Hiscox, 60% of these businesses fold within six months of an attack.
With that in mind, these are two of the major steps SMEs can take to protect themselves from cyber crime:
Upgrading Cyber Security Measures:
A cyber security protocol should be able to prevent, detect, and defend against data breaches and hacks. These measures are not necessarily expensive but can be effective in protecting critical information.
• Network security: Security expert Troy Gill stated that private networks are essential especially with many employees working at home. Configure your office and home routers with a strong password and only grant access to the business’ essential employees. A paid VPN can also be used as the encryption feature adds a layer of security against hackers.
• Multi-factor authentication: Though it can be an inconvenience to input several pass phrases, multi-factor authentication is another way to deter cyber criminals from infiltrating your network. It keeps access only to verified personnel.
• System updates: Hackers are skilled individuals who can learn the ins and outs of a system in no time. That’s why you need to be diligent in updating your software and networks regularly, as these updates mean better security against existing vulnerabilities.
• Data back-up: Similar to most cyber security measures, conducting regular data back-ups can be time-consuming. However, it’s a critical step to protecting precious data and ensuring that you’re able to recover it should a breach occur.
• Employee training: However, all of these measures are futile without proper training. Many data breaches or leaks are a result of employee negligence. Those can be avoided if your staff are educated on cyber risks as well as the proper responses against them.
Even with all the right preventive measures in place, SMEs should be prepared for the consequences of a cyber-attack.
• Business entity: In the case of an attack, the right business entity can protect your personal assets and limit your liability from a lawsuit. This is why it might be appropriate for SMEs to form a limited liability company (LLC), with ZenBusiness’ guide to forming an LLC highlighting how it’s very easy to do so. It has the limited liability feature of a corporation but is a lot less expensive and burdensome to maintain. It essentially means that owners are not personally held liable for lawsuit settlements or debts linked to the business, unlike sole proprietorships or partnerships, which many SMEs are. If a cyber attack threatens the business and the clients’ privacy, you won’t have to pay out of your own pocket.
• Coverage: That said, you should consider purchasing coverage. Cyber insurance is a more specific policy than general liability insurance which doesn’t typically cover damage to digital property. Risk Management Magazine’s article on data breach insurance coverage highlights how this policy includes breach response costs paid to the individuals affected or exploited. It can also pay for forensic analysis, legal counsel, and a crisis management team, as well as the restoration of lost assets, trade secrets, and intellectual property. Purchasing cyber insurance can be a good move for SMEs that deal with a lot of sensitive data, as it is a more comprehensive policy than other types of liability coverage.
It’s clear that cyber security should be a major priority by SMEs. In our recent article entitled ‘Brand Reputation: 15 Future Trends to Maintain Business Image’, maintaining privacy was listed as one of the top ways to instill confidence in your customers. There is no business without the trust of your target market. More importantly, cyber security is an investment that can save you a major headache and a lot of money in the future.