The economy is not doing well right now. Whether you categorize us as being in a recession currently or not, the economy is pretty weak, and the future isn’t looking too promising. As such, it is vital for business owners to think of ways to save money and protect their businesses from disaster. As tempting as it may be, however, businesses cannot afford to cut back on their cybersecurity during recessions.
What happens during a recession?
It doesn’t need to be said that recessions are bad for businesses. Not every business will be affected the same, but everyone will feel the impact somehow. As Harry Truman once said, “If your neighbor gets laid off, it’s a recession. If you get laid off, it’s a depression.”
There are several patterns that we see in every recession. First, individuals start economizing, spending less money. This shifts the demand curve, decreasing demand for products. As a result of a decreased profit margin, businesses lay off workers and decrease overall spending. Recessions also force many businesses to close. For example, 170,000 businesses closed during the 2008 recession.
Why cybercrime increases during recessions.
While business owners often scale down operations during recessions, cybercriminals only become more active and successful. They know that businesses are tempted to cut spending in cybersecurity, and they take advantage of that. For example, internet fraud increased by 33% during the Great Recession.
2022 Cybercrime Statistics
Over the past several years, there have been dramatic increases in cyberattacks.
- BEC scams have caused more than $43 billion of losses since 2016, losses increasing by 65% between 2019 and 2021
- In 2021, 37% of all businesses were hit by a ransomware attack
- Annual losses from ransomware attacks are expected to rise to $265 billion by 2035
- 50% of businesses do not have cyber insurance, and 27% have no plans to purchase it in the future
- 60% of businesses that fall victim to a cyberattack end up closing within six months of the attack
Recent economic downturns have only contributed to these statistics, and will continue to do so. Remember, cybercriminals don’t car about recessions. Thus, cybersecurity during recessions is critical. Cyberattacks can be detrimental to businesses of all sizes.
Cybersecurity During Recessions
With the current economic conditions, it is vital that your business is adequately prepared for cyberattacks. Cybercriminals will take advantage of you if you are not. Here are a few things you should do to protect your business from cybercrime during an economic downturn.
1. Develop a robust cybersecurity plan.
Not only will this help protect your business, your cyber insurance underwriter will look at your current cybersecurity plan to determine your cyber insurance premium. If you need help preparing a cybersecurity plan, you can work with a cybersecurity professional or cyber insurance professional like those at Veritas Insurance.
Avoid the temptation to cut back on your cybersecurity efforts during a recession to save money. A claim will cost you a lot more, possibly spelling disaster for your business.
Avoid the temptation to cut back on your cybersecurity efforts to save money during recessions. A claim will cost you a lot more, possibly spelling disaster for your business.
2. Get cyber insurance.
If your business uses email, credit cards, digital databases, or any other internet-based or digital platform, cyber insurance is a must. It may be tempting to try to do without it in an attempt to save money, but this is an area you cannot afford to cut. Cyber insurance helps you stay open in the event of an attack.
3. Train your employees.
Train your employees on best practices for cybersecurity during recessions. Even small mistakes can have major consequences. Depending on what industry you are in or how technologically savvy your employees are, it may be worth it to bring in a cybersecurity expert to brief your employees.
Independent Cyber Insurance Agents
Especially with current economic trends, it is critical to work with an independent insurance agent who knows your industry and cyber coverage well. There is no “cookie-cutter” cyber coverage. Working with the wrong company can result in overspending or leave significant coverage gaps. Independent agents like those at Veritas can help you find the best coverage for the best rates.
If you would like a free cyber insurance quote, or need help building a cybersecurity or disaster recovery plan, contact Veritas today. Give us a call at (423) 292-4142 or visit our online Service Center to fill out a quote request form. We also offer a free cyber risk assessment to help you determine your business’s actual cyber risks.
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