Small and medium enterprises (SMEs) are emerging as the favorite target of cyber attackers because their business and information technology systems are not structured to protect their assets.
Gary S. Miliefsky, chief executive of cyber security firm Snoopwall, told
Insurance Business in an email exchange that this trend is alarming because these SMEs account for 80% of global GDP, “and cyber criminals know this.”
“These hackers have decided to target SMEs and steal records in smaller amounts to avoid being a target of a major…investigation. One breach could put an SME out of business,” he added.
Miliefsky noted that post-breach, SMEs will have to deal with legal fees, fines and damages for information loss, a tarnished brand, and loss of revenue opportunities. Citing one firm, he said that a breach cost them a total of $225 million.
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“Most businesses could not survive a significant breach, hence the need for better breach prevention tools, technologies and cyber breach insurance to reduce these incredibly significant risks,” he observed.
From his viewpoint, he noted that “traditional insurance does not understand network risks and how network breaches happen.”
Miliefsky added that these insurers need to hone up their technical knowledge before providing coverage to SMEs.
“What’s so important is to measure your risk, behind your firewall, on a regular basis. If you can do this, and insurance markets can understand these… risk measurements, it will be easier for them to quantify the value and the price of a cyber insurance policy,” he explained.
Coverage is especially important, as Miliefsky observed that the public’s ability to deal with cyber threats has not improved.
“In fact, according to World Bank, cybercrime has surpassed drug crime worldwide reaching around $600 billion in 2016. It’s expected to continue to grow exponentially,” he observed.
“Ultimately, (if we don’t take) a new, innovative, and offensive approach to preventing breaches, we will continue to see these problems continue to grow, tremendously.”
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