Small Businesses Face Rising Threats from AI-Driven Scams: The Need for Cyber Insurance
In a digital landscape, small businesses are extremely vulnerable to cyber threats. According to a Nationwide Insurance survey, many small business owners have been subjected to cyberattacks, mainly through scams leveraging generative AI technology. About 25% of small business owners reported having encountered these scams within the past year, primarily involving impersonation through email, voice, or videos. About half of those surveyed had been misled by fake images or videos in the past year. Therefore, 90% of SBOs expressed a strong desire for better cyber protection against scams and showed a willingness to invest in cyber insurance, showing a better awareness and understanding of the risks they are exposed to.
Despite knowing the disastrous consequences, most small business owners tend to be unprepared for such an occurrence. About 69% of SBOs feel confident regarding their ability to tackle a cyberattack, and only 42% have taken the crucial step of securing cyber insurance – highlighting a concerning gap between over-confidence and preparedness. This is also because 81% of SBOs simply underestimate the financial impact of a cyberattack, thinking it would be covered within the cost of less than $5,000. However, the reality is slightly different. An average cyber claim can range from $18,000 to $21,000, taking as long as 75 days to recover. This proves that the majority of SBOs simply do not understand the seriousness of the risks they are exposed to. Another troubling trend from the survey reveals that some of the SBOs believe that their non-cyber insurance policies would cover cyberattacks – and this belief is nothing short of a financial pitfall that would drain their pockets in the event of an attack.
Cyber Insurance alone, however, would also not suffice. A thriving company must have effective Incident Response Plans in place. Almost 69% report already having such plans in place and 28% agree with the fact that their strategies are outdated. With the ever-growing possibility of cyberattacks and a constant cyber threat to all businesses, it is crucial to have an updated plan to minimize potential damages and to maintain customer trust.
As discussed above, business owners must be on top of the game and remain proactive. The essential first step would be to prepare your team for it through training and maintaining strong defenses. Nevertheless, as noted by Nation Lentz from Nationwide; even the best precautions can’t prevent all attacks – and that is where Cyber Insurance saves the day; consider it your best investment!
At Professional Liability Insurance Group, we have experts who can help you navigate these challenges with robust insurance coverage – tailored to your needs. Safeguard your future today – We are Here to Protect You Better!
Call or Text us at 1 (877) PLIG-4123
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