Small Businesses Are Increasingly Targeted by Cybercriminals — Here’s What You Can Do

Cybercrime is on the rise across all industries—but if you’re a small business owner, you’re especially vulnerable. According to a 2023 report, 43% of cyberattacks target small businesses, yet only 14% have adequate defenses in place.

Cybercrime is a highly profitable enterprise. Criminals who gain access to your company’s data often sell it for significant sums on the dark web. As technology advances, these attackers are becoming increasingly sophisticated and brazen.

But the consequences of cybercrime go far beyond data breaches. Cyberattacks can disrupt your operations (with the potential to impact entire local economies), cause financial losses and legal liabilities, erode trust in your brand, and expose your customers to identity theft and fraud. In some cases, cyberattacks have even forced small businesses to close their doors for good.

So, how can you protect your employees, your customers, and your business? Let’s take a closer look at why small businesses are uniquely vulnerable—and what steps you can take to reduce your risk.

Why Small Businesses Are Vulnerable to Cyberattacks

Here are some of the key reasons small businesses are more susceptible to cybercrime than large corporations. (Of course, large companies also face cyber threats—but they’re typically better equipped to handle them.)

• They handle sensitive customer data. Small businesses often collect and store financial and personally identifiable information (PII). As a business owner, you’re legally responsible for protecting this data, so a breach could lead to serious legal consequences.
• They often lack a robust security infrastructure. Smaller budgets can mean fewer resources for cybersecurity. You may have quickly moved your business online without sufficient expertise, employee training, or up-to-date software. Weak password policies are another common vulnerability.
• They’re more likely to pay in ransomware attacks. In a ransomware attack, criminals encrypt your data and demand payment for its release. Small businesses are more likely to pay the ransom, especially if they lack data backups or can’t afford extended downtime.
• They have limited recovery resources. A lack of financial reserves and IT staff can make it harder for small businesses to bounce back from a cyberattack.
• AI is making phishing scams harder to detect. Cybercriminals are using AI to craft highly convincing phishing messages, clone voices, generate realistic images, and impersonate trusted individuals. These tactics make attacks harder to spot—and without proper training, your employees could easily fall for them.

Common Types of Cybercrime

Cybercriminals use a range of tactics to breach small businesses. Here are three of the most common:

Phishing: Attackers use emails or social media to trick employees into revealing sensitive information, such as login credentials.
Malware: Malicious software infiltrates your systems through infected downloads or links, compromising your network. Common types of malware include viruses and trojans.
Ransomware: A form of malware that locks your data by encrypting it—then demands payment to restore access.

Cybercriminals target data like passwords, credit card numbers, bank account details, and customer PII. Once obtained, this data can fuel more targeted attacks. That’s why prevention is key.

How to Protect Your Business from Cybercrime

If you haven’t already implemented cybersecurity measures, now is the time. Here are some essential steps you can take to protect your business and your customers:

• Hire a dedicated IT professional or team with cybersecurity expertise
• Regularly install software updates and security patches
• Require strong, unique passwords—and prohibit password reuse
• Enable two-factor authentication for all critical accounts
• Provide cybersecurity awareness training for employees
• Install firewalls to separate trusted internal networks from untrusted external ones
• Encrypt sensitive data so it’s only accessible to authorized users
• Back up data regularly and store it securely (e.g., in the cloud or offsite)
• Restrict system access to trusted individuals; disable accounts for former employees
• Ensure your vendors follow cybersecurity best practices
• Consider purchasing a cyber liability insurance policy

Consider Cyber Liability Insurance

As cyber threats continue to evolve, a cyber liability insurance policy can offer an extra layer of protection.

Cyber insurance can help cover the costs of:

• Data loss and recovery
• Business interruption and lost profits
• Customer notification and response
• Legal fees, fines, and penalties
• Reputational damage

To learn more about cyber insurance—or to get a quote—speak with an agent at C&S Insurance today.