In Quebec, cyberattacks do not only target large businesses. An SME can also be targeted, especially if it uses digital tools, stores confidential information, or depends on computer systems to operate.
Contrary to a common belief, cyberattacks do not only target large organizations. SMEs can also be targeted because of the data they hold, the digital tools they use, and vulnerabilities that may exist in their systems.
For a small or medium-sized business, a cybersecurity incident can take several forms. It may be a phishing attempt, ransomware, a data breach, unauthorized access, or an outage linked to a system weakness.
These cyber risks can disrupt operations, affect finances, and damage trust with clients or suppliers. They can also raise issues related to business data protection.
Analyzing cyberattacks in small and medium-sized enterprises (SMEs) helps identify risks. It also helps strengthen protective measures and consider the potential role of specialized cyber insurance.
Why this risk deserves SMEs’ attention
This article explains why small and medium-sized enterprises face cyberattack threats. It also reviews common attacks, their potential consequences, and how cyber insurance for SMEs can fit into a risk management strategy.
What is a cyberattack?
A cyberattack is an attempt to access, modify, steal, or disable data, computer systems, or digital accounts without authorization.
Why can SMEs be targeted by a cyberattack?
SMEs can be targeted because they use digital tools, store data, and depend on computer systems to operate.
Even if SMEs may seem less attractive to cybercriminals, attacking several small businesses can be easier than targeting one large company.
Some SMEs may also be tempted to pay a ransom to recover their data or limit the damage.
Hackers often identify weaknesses automatically. When a vulnerable access point is detected, an attack can be launched quickly.
A company’s size alone is not enough to protect it from cyberattacks.
What are the most common cyberattacks affecting SMEs?
The most common cyberattacks affecting SMEs often target employees, system access points, or company data.
- Phishing:
A cybercriminal contacts an employee by phone, text message, or email while pretending to be a legitimate source. Their goal is to make the employee click a link, download malicious software, or share sensitive information.
To lower the victim’s guard, criminals may use social engineering. They often research the business first, then impersonate a colleague or a known supplier.
Artificial intelligence tools can now be used to create highly credible messages. This increases the risk of human error.
Phishing is one of the cyberattacks SMEs face most often. Unfortunately, one employee’s inattention can sometimes let a cybercriminal access company systems.
- Ransomware:
Ransomware is a type of malicious software that infects devices and computer systems. It can restrict or completely block access to systems, files, or computers.
This can significantly disrupt operations. Cybercriminals may then demand a ransom in exchange for a promise to restore access.
- Hacking
An unauthorized person could access devices or accounts by exploiting a security weakness. They could access sensitive employee or customer data and threaten to publish it online.
If login credentials are compromised, a hacker could use an email address or another account to impersonate the victim. Some may steal funds or access the systems of the victim’s clients or suppliers.
- Funds transfer fraud and social engineering
Social engineering is a manipulation technique used by fraudsters. It aims to make someone disclose confidential information, transfer funds, or authorize an unusual transaction. CEO fraud is one of its best-known forms.
For example, an employee could receive a fake email that appears to come from a company executive. The message asks for a quick transfer to a fictitious supplier or fraudulent account. Once the funds are sent, they are often difficult to recover.
What consequences can a cyberattack have on an SME?
A cyberattack can interrupt an SME’s operations, cause financial losses, compromise sensitive data, and damage trust with clients or partners. In Quebec, a privacy breach involving personal information may also create legal and administrative obligations, depending on the situation.
A cyberattack can lead to several consequences for an SME:
- business interruption
- financial loss
- data loss
- system restoration costs
- reputational damage
- loss of client or supplier trust
- risks related to personal information privacy
- possible legal or administrative expenses
How can SMEs help prevent cyberattacks?
Cyber insurance can help a business face certain financial consequence of a cyber incident, depending on the protections included in the policy.
An SME does not always need an in-house cybersecurity specialist. Several simple actions can help reduce its exposure to cyber risks.
A cyber risk refers to the risk of financial loss or reputational harm linked to a technology-related incident. This may include a cyberattack, data leak, or system failure.
Here are some actions that can help reduce risks:
- train employees to recognize phishing attempts
- use strong passwords
- avoid reusing the same passwords
- back up data in different locations
- install software and application updates
How can cyber insurance help an SME?
Even with preventive measures, it is difficult to fully eliminate cyber risks.
That is why some businesses include cyber insurance in their risk management process.
Depending on the protections included in the policy, cyber insurance can help a business face the financial consequences of a cyber incident.
It may provide support for crisis management, system restoration, business interruption losses, or certain costs related to a data breach.
- Coverage for losses suffered, such as business interruption losses and data restoration costs
- Coverage for additional expenses related to the incident, including crisis management and restoring the technology environment
- Coverage for cyber extortion costs
- Coverage for funds transfer fraud losses
- Incident management assistance, including access to cybersecurity, crisis communication, and legal professionals
- Coverage for third-party damages, including damages and defence costs in case of claims from clients or suppliers
- Personal data breach support, including notification costs, defence costs, and administrative fines
What are the eligibility requirements for cyber insurance?
Requirements may vary depending on the insurer and the business profile.
The insurer may want to assess the cybersecurity practices already in place. These may include backups, system access, updates, or employee awareness.
A broker can help gather the information needed before requesting a quote.
Common questions about cybersecurity and insurance in case of cyberattacks
Does my business insurance already cover cyberattacks?
Business insurance generally covers physical damage. Since cyber incidents do not always involve physical damage, they are often excluded. The same logic may apply to business general liability insurance.
Cyber insurance may therefore complement certain business insurance policies by addressing the company’s digital risks, depending on the protections included.
Your broker can help you review the exclusions and protections included in your current policies.
Does cyber insurance replace preventive measures?
No. It does not replace a prevention strategy. However, it may help manage certain costs and needs related to an incident, depending on the protections included in the policy.
How much does cyber insurance cost?
The cost can vary depending on several factors. The insurer may consider the industry, type of data handled, number of employees, and preventive measures in place.
Is an SME too small to be targeted by cybercriminals?
No. Cybercriminals can target businesses of any size. Some attacks are automated and simply look for exploitable vulnerabilities.
What is the most common cyber risk for SMEs?
Phishing remains one of the most common cyber risks. It often aims to obtain access, gather confidential information, or trigger a fraudulent funds transfer.
Does a computer backup replace cyber insurance?
No. Backups can help support business recovery, but they do not replace the protections that may be included in cyber insurance.
Better managing cyber risks in SMEs
Cyberattacks affecting SMEs are a concrete risk, even for businesses that believe they are less exposed. An email address, system access, cell phone, client file, or management tool can become an entry point for a cybercriminal.
Cybersecurity for SMEs starts with prevention. Employee awareness, strong passwords, backups, and updates can help reduce exposure to cyber risks.
Cyber insurance can then complement this approach. Depending on the protections included in the policy, it may help a business face certain financial consequences linked to a cyberattack, data leak, or cyber incident.
For an SME, the goal is not only to react after an incident. It is also to better understand risks, protect data, and choose protections suited to its activities.
