Australian small businesses are facing a growing problem – cyber attacks. Last year, there was a whopping 23 per cent increase in reported cyber attacks, hitting an alarming 94,000 incidents. That’s essentially a newly reported cyber attack every six minutes, a startling number of incidents impacting Australian businesses.
The average cost of cybercrime for small businesses has jumped to $46,000, up from $39,000 just the year before – a staggering 18 per cent leap. Moreover, 25 per cent of Australia’s 2.5 million small and medium businesses would not survive the damages of a cyber-attack.
So, as small businesses navigate this tech-driven world, it’s time to understand the potential repercussions and prepare to face cyber attacks. Now is the time for small businesses to prioritise investing in defending themselves against the looming cyber threat.
Cybersecurity is ranked a lower priority for small businesses
Even with cyber attacks on the rise, many small businesses are still sleeping on cybersecurity, with just 22 per cent of SME owners saying it’s a priority area.
As a result, small businesses exhibit some of the most preventable vulnerabilities in their defences. In an analysis of over 1000 Australian SMEs, Coalition found that a staggering 75 per cent of Australian SMEs use non-secure internet connections, 45 per cent use non-secure email services, and 24 per cent have insufficiently configured an email security system or do not have one at all. If Coalition’s scanning capabilities can identify these vulnerabilities and security concerns, cybercriminals can also easily find these weaknesses to exploit them for cyber-attacks.
SMEs have fewer human and financial resources than medium and large enterprises and, therefore, a lower level of cyber maturity and capabilities. In fact, almost half of small businesses spend less than $500 annually on cybersecurity defences.
The competitive edge of ‘active’ cyber Insurance
With organisations mostly operating in the digital world nowadays, small businesses need to protect themselves even with limited resources. One way to do so is cyber insurance.
However, legacy insurers lack the necessary tools and data to assess risks, set fair premiums, and create insurance policies that actually make sense to SMEs. This deficiency leads to small businesses suffering from volatile premiums and, in some cases, being unable to afford insurance. In short, traditional cyber insurance doesn’t cut it in the digital age.
Luckily, newer entrants to the market have evolved the traditional insurance model to be more “active.” Instead of using old-fashioned factors like company size or sector, active insurance uses proprietary technology to assess and set premiums based on the company’s actual cyber profile, resulting in appropriate coverage that reflects reality.
Active cyber insurance is more than transferring risk; it’s insurance that works with small businesses, evolving with them as they improve their cybersecurity posture. It’s an innovative and agile approach that helps organisations understand their individualised cyber risks, improve defences, and even prevent future attacks before they strike.
It combines assessment, protection, response, and coverage, meaning it not only helps businesses understand where they are and how they can improve but also helps them recover when an attacker inevitably gets through. When cybercriminals manage to sneak in, in-house claims and incident response teams swoop in to make sure businesses return to normal operations.
With cyber breaches becoming more prevalent, small businesses with limited resources cannot afford to become cyberattack victims. Small businesses must stay ahead of cybercriminals and adapt to the digital age. Active insurance has emerged as a more accessible solution tailor-made for SMEs in the digital age. With attacks becoming more costly than ever, cybersecurity can no longer be an afterthought; protections are necessary to safeguard small businesses against potentially irreversible consequences.
