The importance of cyber security for small businesses
Cape Town - During the past two years all businesses, and in particular small enterprises and entrepreneurs had to step up the way they protect their digital and data assets. According to an Accenture report, South African businesses experience 577 cyber-attacks per hour at a cost South Africa R2.2 billion per year.
Philippa Wild, Head of Commercial Underwriting, Santam says, “Apart from the obvious impact of COVID-19 on businesses operations, another C-word – Cyber Security – has become critical for small businesses, especially in the light of increasingly remote work forces.”
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 were social engineering, which proves the increased importance of managing cyber threats 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, cyber security 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 Medium 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, cyber threats are not limited to big corporations and governments. Compared with larger companies, however, many small businesses have fewer resources to dedicate to cyber security which leaves them vulnerable to the ever-evolving tactics of cyber criminals. Companies need to continuously ask themselves if their business is adequately protected and fortunately Santam understand this need and developed comprehensive Cyber Cover that can be added to existing commercial policies.”
Dealing with the consequences of a cyber-attack can be seriously detrimental to a business’s bottom line, costing up to half a million 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 towards your business should they experience a cyber-attack on your system.
3. Business interruption
The offering is designed to assist small to medium business owners 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 cyber-attack and manages the financial implications because of the ransomware.
Wild explains, “Provided the client has selected the core cover being a data breach; they 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 Medium Enterprises of South Africa by allowing potential clients to acquire vulnerability scans, pre and post policy inception.”
She continued to share some frequently asked questions relating to Santam’s cyber cover:
Is the cover optional or mandatory as part of general business cover?
Yes, it is optional and only available in South Africa
What are the dependencies?
- The cover is only for businesses with Annual turnover up to R20,000,000
- The cover is only for businesses with up to 100 employees
- Certain business types are excluded such as state-owned enterprises, financial institutions, hospitals, and municipalities.
Wild concludes, “The best way to protect and manage any risk is to get business insurance that is tailor-made to suit your business needs and operations. As the largest insurer in South Africa, Santam wants to partner with small businesses to cater for their unique insurance needs and threats of which cyber-attacks are becoming more and more prominent.”