Nearly 80% of small businesses lack a critical piece of cyber defense by Caitlin Bronson
Nearly half of all business owners now carry some form of cyber insurance, but small business owners are seriously lagging behind when it comes to a full cyber defense and insurance agents can help, a new Nationwide-sponsored survey reveals.
According to the Harris Poll, almost 80% of small business owners lack a cyberattack response plan. Of these, 40% said they don’t expect their company to be hit by a cyberattack and 56% said they believe their current software alone is security enough.
This is despite the fact that a full 63% admitted to having been hit by at least one type of cyberattack, such as hacking, viruses or phishing attempts.
The discrepancy between personal experience and efforts at protection comes as the number of US data breaches hits an all-time high – a record 783 in 2014, in which 85.6 million records were exposed, according to an October 2015 Insurance Information Institute report.
It’s concerning, but Nationwide Associate Vice President of Commercial Lines Tony Fenton believes it may also be an opportunity.
“The property/casualty industry can address this gap,” Fenton told industry reporters. “Education and options are key to driving awareness and cyber risk mitigation.”
Certain cyber products come with carrier services that help business owners better assess their preparedness for a data breach, including practical tips and other educational resources.
Brokers themselves also need to better understand the cyber product and risk prevention techniques.
Christine Marciano, president of the specialized independent agency Cyber Data Risk Managers, told Insurance Business America in an earlier interview that agents need to have more than just a marginal understanding of cyber risks in order to be successful. In an era of sophisticated risk, they will need to function as the absolute authority on cyber security.
“Brokers should start looking at the [cyber insurance] product, taking a look at the coverages that are offered and bringing the topic into conversation with their clients,” she said. “A lot of brokers still don’t understand the product, and the broker mentality is that if they don’t understand the product, they won’t talk about it with their client.”
The Nationwide-sponsored Harris Poll surveyed 500 small business owners who employed fewer than 300 employees.