Small Business Closure due to Cyber Breaches

by Ben Brown | 11/29/2022

Business solvency due to cyber breaches

The Real Threat of Business Solvency Due to Cyber Breaches

When it comes to cyber security, there is a lot of discussion around the risks that companies face in terms of data breaches and the theft of confidential information. However, what is often overlooked is the very real threat of business solvency due to cyber breaches.

In this post, we’re going to look at some of the latest statistics around company solvency due to cyber breaches and what you can do to protect your business both before an attack and during if they still breach your infrastructure.

Business Solvency Due to Cyber Breaches.

It’s not just the initial impact of a cyberattack that’s driving companies into insolvency, it's also the lingering impact of a cybersecurity incident. Companies that do survive the blow can still be paying for remediation, damage and lost business for years after the initial attack, whilst also wrestling with the ongoing reputation damage. After paying for immediate investigation, mitigation and repair, the costs from a cyberattack don’t stop coming. In fact, for some companies, they’re just the beginning.

With cyber-attacks becoming more common and sophisticated in recent years, the threat to business solvency due to cyber breaches in more real than ever. The reason that cyber-attacks are so costly is because they can lead to a loss of business, as well as regulatory fines and legal fees. In addition, data breaches often result in the need to hire forensic investigators and public relations firms to help repair the damage to the company's reputation.

Worrying Statistics Around Business Solvency Due to Cyber Breaches.

Ransomware attacks are big business for attackers now and we are seeing a real hike in their frequency. In the last 12 months alone, there have been some very high-profile cases of businesses being hit with ransomware attacks, resulting in businesses having to pay large sums of money to get their data back.

However, it's crucial to remember that small businesses are greatly at risk when it comes to an attack as they simply don't have the same resources to fall back on. In fact, it has been estimated that up to 60% of small businesses that are hit by a ransomware attack end up going out of business within six months.

Recent figures published in the Hiscox Cyber Readiness Report 2022 state that:

It's important to remember that it's not only a ransomware attack that can bring your business crashing down, but any type of cyber-attack can also result in severe financial and reputation damage.

Common Cyber Security Issues Businesses Face Today.

There are many cyber security issues facing businesses today, and the list seems to be growing. Here are just a few of the most common ones:

Ransomware: This is a type of malware that encrypts your data and then demands a ransom to decrypt it. Malware: This is software that is designed to damage or disable computers. It can be spread through email attachments, infected websites, or malicious ads. Phishing: This is when attackers send emails that appear to be from a legitimate company in order to get victims to click on a link or download an attachment that will install malware on their computer. Denial of service (DoS) attacks: This is when attackers flood a website with traffic in order to make it inaccessible to users. SQL injection: This is when attackers insert malicious code into a database in order to extract sensitive information.

What to Do During an Attack!

In the event of a major cyber security incident, it's essential that businesses have a plan in place to ensure continuity of operations. A well-defined and organised cybersecurity incident response plan is key to damage control from a cyberattack. Quick action is of utmost importance when responding to a cybersecurity incident. By starting damage control immediately, you can reduce its effect on your operations and long-term impact which could then lead to business solvency due to cyber breaches.

All cyber incident response plans should include:

By having an incident and continuity plan in place, businesses can ensure that they are able to still operate in the event of a major incident. This is essential and non-negotiable for businesses of all sizes.

Cyber-attacks pose a very viable threat to business solvency, so business need to ensure that they have robust cyber security measures and solutions in place to minimise the potential for a successful attack. If you don't already have these measures in place, please contact us so that we can help steer you in the right direction.

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