Small And Medium Businesses Should Not Ignore the Need for Cyber Insurance

Data breaches are viewed as the top threat to business globally, according to the Global Risk Management Survey run by AON, which revealed the widely held certainty that “It’s not if you’ll be breached, but when.” Should small and medium businesses be paying more attention?

Any business that stores important data, such as identity numbers contact details, passport copies, sensitive health information, credit card numbers or any other personal information, whether on computers or in the cloud, is at risk of a cyber-attack.

And while it’s true that hackers mostly target large companies, as well as schools and hospitals and government systems, it would be a mistake for small-to-medium businesses (SMBs) to rely on that, says Jacques Botes, MD of HFM Independent Insurance Brokers. In fact, by their very nature, the majority of SMBs don’t have the capability, budget, or time to implement a solid IT security strategy, making them easy targets for attackers.

Advances In Technology Making Hacking Easier

The rapid advance of disruptive technologies such as artificial intelligence/machine learning, 5G, IoT, and quantum computing is fast changing the way we view and use the internet, especially when it comes to data security.

In particular, the combination of AI’s ability to generate code and machine learning to identify vulnerable targets offers hackers unprecedented capability to break into and steal information or corrupt systems.

This is evidenced by the latest reports from, among others, Check Point and Independent Advisor, which paint an alarming picture. Check Point notes that one out of every 31 organisations worldwide experienced a ransomware attack every week in the first quarter of 2023, with the Independent Advisor reporting that hacks are happening every 39 seconds.

These increasingly sophisticated technologies are making hacking much easier, with Check Point noting that even legitimate tools such as ChatGPT are opening the door to “less-skilled threat actors to effortlessly launch cyberattacks”.

“In these conditions, the world is becoming an oyster for hackers and would-be hackers alike, which further opens the door for attacks on companies of all sizes,” says Botes. His view is borne out by a report by British cybersecurity firm, Sophos, showing that South Africa had the biggest increase in ransomware attacks in the world, from 51% of firms in the 2022 survey to 78% in 2023.

What Does Cyber Insurance Cover?

Cyber liability insurance covers the damage that your business suffers because of a cyber security breach. This typically includes investigative services, data recovery and identity recovery, legal fees, customer notifications and settlement costs arising from third-party liability claims due to privacy breaches, lost income due to business interruption, and data breaches due to human error.

“The reality is that no company is safe from cyber-attacks, and although it is becoming increasingly difficult to prevent them, it is possible to reduce the risk to your business by taking out cyber insurance,” Botes concludes.

HFM’s slogan is “Your broker for life”. This forward-thinking statement not only reflects our commitment to providing superlative service from the moment of our first consultation but also means we will help you think ahead to protect your business from the potentially devastating costs of a cyber attack. Contact us today.