Small Businesses Struggle With an Increase in Cyberattacks By Lisa Ward, June 7, 2022, Wall St. Journal
As small businesses have accelerated their adoption of new technologies for remote work, communication, production and sales during the pandemic, their expanded computer networks have created new vulnerabilities to phishing and ransomware attacks. But many small businesses still don’t expect to be targeted by hackers, so preparing for a cyberattack is well down their list of priorities.
The risk of an attack has grown dramatically for small businesses over the past couple of years. “During the pandemic, small businesses were attacked at twice the rate of larger organizations,” says Ajay Bhalla, president of cyber and intelligence at Mastercard.
During 2020 and 2021, data breaches at small businesses globally jumped 152%, compared with the two prior years, according to RiskRecon, a Mastercard company that assesses companies’ cybersecurity risk. Breaches at larger organizations rose 75% in the same period, according to RiskRecon.
But many small businesses are more focused on keeping their heads above water amid the many other problems that have arisen or grown during the pandemic than they are on cybersecurity. “My clients are worried about the ongoing effects of the pandemic, labor and supply shortages and inflation,” says Marilyn Landis, owner of Basic Business Concepts Inc., a company that acts as a chief financial officer for small businesses. Cybersecurity isn’t top of mind for her clients, she says.
Some businesses are aware of the threat but don’t realize they aren’t insured against it. “Too many small businesses incorrectly still expect to be covered for cyber risk under their property and liability policies,” says Loretta Worters, a spokeswoman for the Insurance Info Institute. General commercial business insurance tends to exclude items like additional legal fees due to a cyberattack, and the cost of repairing digital infrastructure and restoring data.
According to a WSJ Pro Cybersecurity survey of cybersecurity pros published in December, 52% of small businesses (those with less than $50 million in annual revenue) have insurance coverage for cyber risks, compared with about 75% of larger businesses.