News from the US should serve as a reminder to small businesses to ensure they are protected from the threat of hacking which is increasingly carried out by sophisticated cybercriminals.
While large companies have taken measures to defend themselves, many small businesses leave themselves open to the theft of data and corporate account takeovers by assuming that it will never happen to them. Even worse, many mistakenly assume that their standard commercial property business insurance covers them against such losses.
Golden State Bridge, a construction company based in California suffered losses of more than $125,000 when cybercriminals hacked into its bank account. The hackers made two transactions using the office manager’s user name and password, diverting cash to other bank accounts in several locations.
Computer security experts say these crimes are becoming increasingly common and small businesses are particularly at risk as many lack firewalls and monitoring systems. It is estimated that more than 10 per cent of US small businesses have been the victims of cybercrime with losses totalling over $2 billion.
Because Golden State Bridge had been hacked previously they had taken out commercial property business insurance against cybercrime and fraudulent bank transfers. However not all small businesses are covered.
“It’s very rare that policies have them,” said Golden State’s chief financial officer Ann Talbot. “I’ve talked to brokers who tell me only one in 10 business customers ask for it, and it’s cents on the dollar.”
UK small businesses should take heed because cybercrime is also on the rise on this side of the Atlantic. Only recently it was revealed that one UK business had lost a significant amount of money as a result of intellectual property theft. Many of the attacks originate from Russia and China and MI5 is currently investigating several incidents.
Peter Castle of insurance brokers Bluefin warns that commercial property business cover should be elevated to reflect this growing threat. He said; “Many policies provide cover against physical loss or damage but fail to protect effectively against intangible assets such as electronic data.”
Is your small business covered against the threat of cybercrime? Has your business ever been hacked? Share your stories with us below.
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