Everyone knows cyber attacks are a possible risk, but how frequently do they actually occur? Accurate cyber claim frequency for SMB’s is hard to come by because insurers do not classify cyber claims, and SMBs consistently and generally do not share claim information. But rough data is available. Surprisingly, data breach claims represent only about 15% of claim activity for SMB’s. The most frequent cyber claims are ransomware, at approximately 40%, and cyber crime at 35%. Currently, ransomware attacks are declining in favor of cybercrime attacks.
Although much of the media focus is on large company cyber losses, SMBs are prime targets and data breach is not the driver of loss. In fact, the statistics show that the predominant cyber exposure for SMBs are ransomware and cyber crime, and these attacks put organizations out of business.
Cyber Security Statistics and Trends
Here’s what we know. Since the start of the COVID-19 pandemic, cyber crime has skyrocketed by 600%. Companies must adapt and protect their businesses or face debilitating mitigation costs as the risk of a cyber incident or breach grows, with the average cost of a ransomware attack now $1.85 million.
Small businesses are increasingly becoming the target of attacks, with nearly half of all cyber incidents aimed at small businesses. A slim percentage of small businesses feel adequately prepared to manage and defend against cybercrime, illustrating the vast potential for cybercriminals to exploit small businesses. The healthcare industry was the main target of cyber attacks, with one in 42 healthcare organizations affected by ransomware.
Most Common Causes of Cyber Attacks
If organizations want to defend against cyber attacks, they must know what they’re up against. Here are some of the most common forms of cyber attacks:
When a ransomware attack occurs, a cybercriminal gains access to data and demands the organization or individual pay a ransom to “unlock” their data. Some hackers also threaten to sell the data online for an additional ransom. Ransomware is often a layered approach, with cybercriminals using a phishing tactic to gain access to data and then stealing or locking down critical or proprietary data.
Social engineering is a form of cyber attack that essentially tricks someone into providing credentials or downloading malware. Sometimes hackers will pose as a colleague or executive and request information from a team member, making it a challenging type of cyber attack to defend against.
Imagine you get an email from your bank stating that you need to log in and verify your account information, so you click a link and enter your information. If that email was a phishing attempt, you gave a hacker all your banking login details. That’s what phishing attacks do – they appear to be from a reputable organization or individual and then collect critical information necessary to hack or breach someone’s account.
Malware occurs when someone receives a fraudulent link or download that infects their system and allows a hacker any access they need to data and systems. Once the person gains access, they can steal or lock down data.
Likelihood of a Cyber Attack
There’s no doubt that the number of cyberattacks continues to rise. And it’s not just the number of attacks; it’s the level of sophistication too. Global cybersecurity attacks rose 28% in the third quarter of 2022 alone.
The possibility of a cyberattack on a business or individual is high, even if you don’t think you could be a target. It’s estimated that there is a new attack on the web every 39 seconds – and no target is too small.
As hackers set their sights on small businesses, organizations must recognize the imminent threat posed by inadequate cyber security practices. Because of the high cost of mitigating and recovering from a data breach or security incident, 60% of small businesses that experience a cyber attack go out of business within six months.
How to Prevent a Cyber Attack
While there’s no surefire way to completely prevent a cyber attack, you can better prepare your business if an incident occurs. These are some key ways to prepare and protect your business from cybercriminals:
- Implement a robust, ongoing employee cybersecurity training program
- Enhance your security feature (use multi-factor authentication, develop permissions-based processes to protect data)
- Require strong passwords or passphrases
- Use effective antivirus software
- Educate yourself about new threats
Cyber insurance is one of the most critical parts of a strong cybersecurity protection plan. A cyber insurance plan protects your organization from exposures related to technology and data, something virtually every business uses during their work. Cyber insurance policies are tailored to the organization’s specific risks and needs, so it’s important to work with an expert if you need to buy coverage or update your current cyber insurance coverage.
If you have questions about cyber insurance, reach out to the eSpecialty team today. We’re always available to discuss your needs and options.