Persistent Myths About Cyber Threats Could Be Holding Back Small Businesses

Small Business and Cyber Security

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In an increasingly digital world, many small businesses still underestimate the threat of cyberattacks. A startling number of business owners hold on to the dangerous misconception that cybercriminals only target large companies. This myth can leave businesses exposed to unnecessary risk, and according to recent research, it's holding many back from getting the protection they need.

A recent survey by Travelers, the 2024 Travelers Risk Index, found that cyber threats ranked as the top concern for businesses of all sizes. Hart Research, which conducted the survey on behalf of the insurer, polled over 1,200 business decision-makers across the U.S. An alarming 62% of respondents named cyber threats as their top worry—yet nearly half of smaller businesses (48%) believe they won’t be targeted because they aren’t “big enough.”

The Dangerous Myth of "Too Small to Be Hacked"

Tim Francis, enterprise cyber lead at Travelers, explained that this belief is a dangerous fallacy. During a webinar presenting the study’s findings, he noted that cybercriminals often go after “low-hanging fruit,” targeting any business with a vulnerability, regardless of size. With advances in scanning technology, hackers don’t need to know much about a business before they launch an attack—they simply look for weaknesses they can exploit.

“Once inside, they’ll take money from a small, medium, or large company—size doesn’t matter,” Francis said. This reinforces a crucial point: small businesses aren’t immune. In fact, if a company has already been attacked and hasn’t taken steps to improve its defenses, it’s even more likely to be hit again.

Cyber Risks Growing for All Businesses

The Travelers survey found that 24% of respondents had experienced a cyber event in the past year, up slightly from 23% in 2023. More than half of these incidents occurred in the last 12 months, and over 80% within the last two years. The growing sophistication of cyberattacks—along with the increasing frequency of incidents—should serve as a wake-up call to businesses of every size.

Security breaches, unauthorized access to financial accounts, and ransomware were among the top concerns reported in the survey. Ransomware attacks, in particular, saw the largest increase, climbing from ninth place in 2023 to the third most pressing issue in 2024.

Cyber Insurance: More Than Just Financial Protection

Despite the clear risks, many small businesses are still slow to adopt cyber insurance. The Travelers Risk Index revealed that while 65% of all businesses now have a cyber policy, this number drops significantly for small businesses, with only 41% having coverage.

Cyber insurance is much more than a financial safeguard. It provides access to a network of experts, including breach coaches and incident response teams, who can help businesses recover from an attack. As Francis noted, “A cyber insurance policy is more than just words on a page and a financial guarantee—it’s an ecosystem of claims professionals.”

Unfortunately, many small businesses still don't see the full value of cyber insurance. With limited resources and expertise, these businesses are often at a higher risk of falling victim to a cyberattack, and yet, many remain uninsured.

The Growing Complexity of Cyber Risks

As cyber threats continue to evolve, so too does the complexity of the insurance landscape. Artificial intelligence (AI) has enabled cybercriminals to launch more sophisticated attacks. Denise Perlman, president of national business insurance at Marsh McLennan Agency, points out that 95% of customer interactions in the insurance industry will be AI-facilitated by 2025. This interconnected world, while providing new opportunities, also presents new risks—especially for businesses that rely heavily on third-party vendors.

For example, the recent global outage caused by a faulty update pushed by CrowdStrike, a cybersecurity company, demonstrates how deeply interconnected the modern business ecosystem has become. Even though this incident wasn’t a cyberattack, it highlights the risks businesses face from third-party vendors.

Proactive Risk Management is Key

With cyberattacks showing no signs of slowing down, businesses must take a proactive approach to risk management. Cyber insurance is a critical tool, but it should be part of a larger cybersecurity strategy. Small businesses, in particular, need to assess their vulnerabilities, implement stronger security protocols, and invest in insurance coverage to protect themselves from potentially devastating losses.

As the cybersecurity landscape becomes more complex, staying informed and prepared is essential. To learn more about protecting your business from cyber threats, explore the other articles on our website for expert insights and actionable strategies.

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