Cyber risks are the top concern among businesses of all sizes, according to a survey by The Travelers Companies, Inc.
Of the 1,200 business leaders who participated in the survey, 55 percent said they worried some or a great deal about cyber risks, ahead of medical cost inflation (54 percent), employee benefit costs (53 percent), the ability to attract and retain talent (46 percent), and legal liability (44 percent).
Travelers said in a statement that, as concerns about cyber threats have grown, a higher percentage of businesses across nearly every industry reported taking proactive measures to safeguard against cyber risks – although a sizable percentage had not implemented those preventive best practices. The steps respondents said that they had taken included:
- Purchasing a cyber insurance policy (51 percent of survey participants, up from 39 percent from a Travelers survey last year).
- Creating a business continuity plan in the event of a cyber attack (47 percent, up from 38 percent).
- Taking a cyber risk assessment for themselves (49 percent, up from 45 percent) and their vendors (41 percent, up from 37 percent).
- Updating computer passwords (74 percent, up from 71 percent).
"[M]ore businesses are taking steps to prevent a cyber event, but it's still alarming that nearly half don't have the proper insurance coverage," said Tim Francis, enterprise cyber lead at Travelers. "One cyber attack can put a company out of business. Taking the threat seriously and implementing a risk management program that addresses possible exposures can help a company not only avoid an attack but also recover from one as quickly as possible."
Since 2015, the percentage of small business respondents who have suffered a cyber attack has tripled, from four percent to 12 percent this year. Increases also were reported among medium-sized companies (10 percent in 2015 to 20 percent this year) and large businesses (from 19 percent to 33 percent).
"More companies are experiencing cyber attacks," Mr. Francis said. "The cost of a single breach to a small business can easily reach a substantial amount of money on top of the time it takes to restore the business, so protecting a company's assets with a cyber insurance policy is critical."
Other key findings from the survey included:
- Suffering a security breach and a third party gaining unauthorized access to bank accounts were tied as the biggest cyber-specific worry among businesses. The third-highest cyber-specific concern was an extortion or a ransomware attack, which increased to 52 percent from 44 percent in 2018. Lastly, 43 percent of respondents said social engineering scams were a concern, up from 36 percent last year.
- While there was greater awareness of cyber risks generally, one in four survey participants said that they did not believe their business would suffer a cyber attack, and thus opted not to purchase a cyber insurance policy. The top reason for not purchasing a cyber insurance policy, cited by 31 percent of respondents, was the expense.
- Three-fourths of survey participants agreed that having the proper cyber prevention tools in place was critical to the well-being of the business, an increase from 69 percent in 2018.
- Nearly 80 percent of respondents admitted that it was difficult to keep up with the ever-changing cyber landscape.
- The percentage who said today's business environment was more risky remained at 36 percent.
Learn more: www.travelers.com.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].