The internet has been a great boon for small businesses. It allows them to reach a customer base far larger than the one they might find by only trading on the high street. This reach is international in some cases and digital technology has helped to level the playing field, allowing small firms to compete with multinationals on their own terms.
Of course, most business owners are aware that these benefits come with a wealth of new risks. Many of these can be grouped under the general heading of cyber-crime. If the internet has been a gift to business, then it has equally been a gift to thieves and conmen. Hackers, online fraudsters, proponents of malicious malware and identity stealers cost UK businesses several billion pounds every year. And a new report suggests that small businesses bear a disproportionate percentage of these losses.
The Federation of Small Businesses (FSB) recently published a report titled Cyber Resilience: How To Protect Small Firms In The Digital Economy. It found that small businesses receive seven million attacks a year between them and that the overall cost of these was about £5.26 billion. Individual businesses that fell foul of cyber-crime lost an average of £3,000 each.
This was a much greater loss proportionately than that suffered by larger businesses. Perhaps this is because big business is better able to afford effective cyber defences; perhaps they are also more aware of the need to have fully comprehensive insurance cover.
Last line of defence
While 93% of small firms said they took precautions against cyber-crime, 66% fell victim to it in the last two years. This emphasises the fact that while cyber security is vital, so is comprehensive insurance cover. No security system is completely impregnable and insurance against losses, identity fraud, legal costs and professional indemnity is an essential last line of defence. Often small businesses are less able to recover from the serious damage that cyber-crime can cause – whether financial or by damage to their reputation.
Cyber-crime losses can come in many forms. Losing money directly, or losing the trust of your customers, clients and peers because your website has been hacked, can be equally catastrophic but cyber insurance can protect your business if the worst happens.
If you’re not sure what insurance you need to cover your business against the consequences of cyber-crime, give us a call on 01603 218000 for expert advice and cover.