Cybersecurity Becoming More Important For Small Businesses
During the past two years all businesses, and in particular small enterprises and entrepreneurs, have had to step up in the way they protect their digital and data assets. According to an Accenture report, South African businesses experience 577 cyberattacks per hour at a cost of R2,2 billion per year.
Philippa Wild, head of Commercial Underwriting at Santam, says, “Apart from the obvious impact of COVID-19 on businesses’ operations, another C-word – Cybersecurity – has become critical for small businesses, especially in the light of increasingly remote workforces.”
According to last year’s KnowBe4 African Cybersecurity & Awareness Report 2021, 32% of respondents were affected by cybercrime while working from home and one third of the attacks constituted social engineering, which proves the increased importance of managing cyberthreats effectively.
With the transition to a digitally seamless world, a higher acceptance of e-commerce and the premium on consumer-data driven in part by POPIA legislation, cybersecurity has become a focus for many companies. According to the Santam 2021 Insurance Barometer Report, cyber risk is now widely recognised as a global emerging risk, with 40% of small and medium-sized enterprises surveyed relying on free anti-virus software for cyber protection and up to 27% not backing up their data. In the same report, it was found that 45% of commercial intermediaries ranked cybercrime as their third-highest business risk, with 36% of small businesses ranking it their fourth-biggest risk.
Wild explains, “Contrary to popular belief, cyberthreats are not limited to big corporations and governments. Compared with larger companies, however, many small businesses have fewer resources to dedicate to cybersecurity, which leaves them vulnerable to the ever-evolving tactics of cybercriminals. Companies need to continually ask themselves if their business is adequately protected, and fortunately Santam understands this need and has developed comprehensive Cyber Cover that can be added to existing commercial policies.”
Dealing with the consequences of a cyberattack can be seriously detrimental to a business’s bottom line, costing up to half a million rand or even more in some instances. Wild says, “The reality is that when it comes to starting a small business, new owners have many decisions to make and often leave cybersecurity measures by the wayside.”
This is a massive risk, which of course is something that Santam understands. As such, the company offers bespoke cyber insurance cover that is specifically curated for businesses that employ up to 100 people with a turnover of up to R20 million.
The four areas covered include:
1. Data breach and restoration
After a breach, the business may incur legal costs and pay damages to third parties. This extension provides cover for legal defence costs and damages if the case is unsuccessfully defended.
2. Third-party liability
This covers your business against any claims that your clients or intermediaries make against your business should they experience a cyberattack on your system.
3. Business interruption
The offering is designed to assist owners of small to medium-sized businesses to get their business back on track after a breach.
4. Cyber extortion and cybercrime
This extension helps get businesses running as soon as possible after a cyberattack and manages the financial implications because of the ransomware.
Wild explains, “Provided the client has selected the core cover being a data breach, he/she can adjust the remaining limits accordingly or add and remove the remaining covers as necessary. The cyber cover provides an end-to-end service to the small and medium-sized enterprises of South Africa by allowing potential clients to acquire vulnerability scans, pre and post policy inception.”
Article with thanks to Santam.