Cyber threats are everywhere. From data breaches to ransomware, almost every day there is a new story about a business impacted by an adverse cyber event. As a result, cyber insurance is becoming increasingly important for businesses of all sizes, including small businesses and family offices. Recent stats illustrate the challenge:
- 73% of US small business owners reported a cyber attack last year.1
- 82% of all ransomware attacks target SMB organizations.1
- 37% of family offices have been the target of cyber attacks, some of them more than once.2
And the impact of these attacks can be devastating:
- 33% of small business owners hit by cyber-attacks say they have experienced financial losses.1
- 60% of small businesses close within six months of being hacked1
- $4 million is the average cost of a data breach globally, with individual family offices at risk of losing up to $500,000 in ransom.3
As part of our most recent interview in our “Protecting Wealth” series focused on cyber liability, Brian Thornton, CEO of ProWriters noted that cybercriminals are not necessarily targeting a specific company, they are targeting weak points, such as software that a business might be using, exposing them to an attack.
“The criminals are extremely crafty,” Brian Thornton, CEO of ProWriters stated in a recent conversation with Tara Bramwell, Director of AssetSure. “Small businesses don’t think they’re the target, but that’s not really the issue—often small business is a target just because the criminals are targeting software with known vulnerabilities. And if you’re utilizing a range of software applications, the bad actors are often scanning for that vulnerability and software, not a specific company, and then targeting it, whether that’s with malware or ransomware. And so, it’s the software vulnerability that they know about that hasn’t been patched yet that is the target.”
With the risk clear and growing, more businesses are stepping up their security game and transferring their risk—as they should.
Know your risk
Cybercrime is a revenue generating enterprise and as such the schemes targeted at businesses of all sizes tend to be acts such as ransomware, social engineering and phishing, and password compromise.
Despite the data clearly demonstrating the risk and potential exposure for companies financial, reputational, and regulatory perspectives, many still underestimate their risk and underinsure themselves and their business. Ironically, these same businesses often over insure themselves for other potential risks. Costs of a cyber breach add up quickly—ransomware, legal fees, forensic fees, public relations fees and more can quickly deplete funds and create a precarious financial position. Thus, it’s strategic to transfer as much of that risk as possible to someone else.
In a dynamic market, you need a dynamic partner
The cyber landscape is rapidly evolving with new threats and bad actors emerging regularly. Staying on top of the potential security risks can be daunting, but that is where an insurance provider can do more than just provide financial protection. Today, leading carriers offer their clients more than just an insurance policy, they provide tools, services, advice and support before and after a potential incident.
For example, many insurers are now offering credit for and access to managed detection and response (MDR) and end point detection and response (EDR) solutions, which reduce the likelihood and impact of cyber incidents. Additionally, top insurers have expert legal advice, support for regulatory compliance, third party protection and best practices for improving cyber resilience.
Cyber insurance serves as a crucial safety net, offering financial protection against the costs of data breaches, loss of income due to cyber-attack disruptions, and potential legal liabilities, while also providing risk management tools and support for reputation management, regulatory compliance, and cyber incident response.
To learn more about cyber risk and insurance, we invite you to watch our complete interview with Brian Thornton, President of ProWriters Insurance. A seasoned expert in cyber insurance, Brian offers valuable perspectives on the current landscape and strategies to safeguard businesses and family offices.
1Smith, Gary. “Cyber Attacks on Small Business Trends.” StationX, April 2024.
2UBS. “Global Family Office Report.” USB, 2023.
3Trustworthy. “Strengthening family office cybersecurity: Key considerations for family offices looking to protect themselves against cyber threats.” &Simple. January 2024.