The Effect of Cyber Risk on SMBs

Aon South Africa has launched its latest SMB Cyber Risk Report, shining a spotlight on the growing cyber threats faced by small and medium-sized businesses (SMBs). As digital threats become more frequent and sophisticated, SMBs remain vulnerable to cyber emergencies - defined as any incident that compromises the integrity, confidentiality or availability of an organisation’s data. These events can lead to serious operational disruptions, financial setbacks and reputational harm.

“The report delves into the many facets of cyber risk and what SMBs can do to alleviate many of the resource constraints experienced. This is particularly challenging given the increasing regulatory and compliance burdens these businesses are faced with. It is critical for SMBs to overcome resource limitations, reduce exposure and build resilience in today’s evolving digital landscape,” says Zamani Ngidi, Business Unit Manager for M&A and Cyber Solutions at Aon South Africa.

SMBs are not immune to the threat of cybercrime:

• 46% of all cyber breaches impact businesses with fewer than 1,000 employees according to Verizon's 2021 Data Breach Investigations Report.^[1]
• One in three small and medium-sized businesses have experienced a cyber-attack.^[2]
• 81% of SMBs say AI increases the need for additional security.^[3]
• Less than one in five SMBs have a cyber insurance policy.^[4]

Key Focus Areas of the Report

Aon’s report explores several critical areas to help SMBs understand and prepare for cyber threats:

• Understanding Cyber Emergencies: The report defines cyber emergencies as events like data breaches, hacking, and malware attacks - each capable of inflicting severe damage to an SMB’s operations, finances, and reputation.
• Navigating Cyber Legislation: The report also discusses the legal implications of data breaches, especially when personal or financial data is compromised. It examines the relevant South African laws that safeguard consumer rights, promote secure digital transactions, and protect personal information - offering a framework that SMBs must understand and comply with.
• Potential Cyber Losses for SMBs: The report breaks down the typical financial impacts SMBs face, including business interruption, data recovery expenses, and costs related to cyber extortion.
• Protective Measures for SMBs: Lastly, the report outlines both proactive cybersecurity solutions and insurance options that can help SMBs mitigate risks and recover more quickly from cyber events.The
• Role of a Cyber Emergency Response Team: Aon emphasizes the importance of having a dedicated cyber emergency response team. This team offers 24/7 support from cybersecurity experts to help businesses respond swiftly to incidents and strengthen their defences against future threats.

“By analysing exposures, taking steps to address risk and establishing a strategy for assembling a claim quickly and accurately, businesses can better prepare themselves for the threat of a cyber incident,” says Zamani.

To find out more about the report:  https://aon.io/3JBfY3q

About Aon

Aon exists to shape decisions for the better — to protect and enrich the lives of people around the world. Through actionable analytic insight, globally integrated Risk Capital and Human Capital expertise, and locally relevant solutions, our colleagues provide clients in over 120 countries and sovereignties with the clarity and confidence to make better risk and people decisions that help protect and grow their businesses. 

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Disclaimer:

This document has been compiled using information which was current and accurate as at the date of publication.  The information contained in this document should not be considered or construed as insurance broking advice and is for general guidance only. Accordingly, the information contained herein is provided with the understanding that Aon, its employees and related entities are not rendering insurance broking advice. As such, this should not be used as a substitute for consultation with an Aon Broker or Consultant.

^[1] https://www.verizon.com/business/resources/reports/dbir/2021/smb-data-breaches-deep-dive/

^[2] https://www.microsoft.com/en-us/security/blog/2024/10/31/7-cybersecurity-trends-and-tips-for-small-and-medium-businesses-to-stay-protected/

^[3] https://cdn-dynmedia-1.microsoft.com/is/content/microsoftcorp/microsoft/final/en-us/microsoft-brand/documents/SMBCybersecurity-Report-Final.pdf 

^[4] https://www.aviva.com/newsroom/news-releases/2023/12/One-in-five-businesses-have-been-victims-of-cyber-attack-in-the-last-year/