Cybersecurity & Insurance: Protecting SMEs from Data Breaches

February 26, 2025 By Christine Margret No Comments 4 minutes

There’s no doubt that cyberattacks have been growing more prevalent. In 2024, the number of global cyber attacks doubled from 2020, with the average cost of data breaches reaching an all-time high of $4.88 million. Overall, the global cost of cybercrime is projected to reach $10.5 trillion in 2025, and the challenges don’t look to be slowing down any time soon. 

If you’re running an SME, this presents a significant problem. While big businesses might seem like the prime target for cyber hackers, it’s small and medium-sized enterprises that are more frequently targeted, mainly due to their weaker cybersecurity measures, lack of dedicated IT staff, and a perception that they hold more valuable data despite their size, making them easier to infiltrate.

It’s important to realize that, as an SME, it’s a question of when you will be targeted by cyberattackers, not if. To prepare yourself, then, there are two things you need to have in place. Business insurance and the right cybersecurity practices.

Attaining Business Insurance

Let’s start with business insurance. In a recent study, it was discovered that nearly 44% of SMEs – including sole traders – didn’t have business insurance, with reasons cited including the business ‘being too small’, ‘not having commercial premises’ and the ‘owner not having time to assess their insurance needs’. 

With so many risks threatening your small business, however, having business insurance is no longer a luxury, it’s necessary to survive and flourish in a dangerous landscape. With the right business insurance, you have the ability to protect your business from numerous incidents, including cyberattacks. 

Cyber liability insurance, for example, can cover the costs associated with data breaches, including legal fees, customer notification costs, public relations efforts, and the cost of restoring your system. It doesn’t have to be expensive, either. In 2025, there will be plenty of cheap business insurance that can be tailored to your business, helping you to manage risks effectively without breaking the bank. All you have to do is take the time to research and invest in insurance options that suit your SME, specifically. 

Implementing Cybersecurity Practices

Even with business insurance in place, however, you want to make sure that you’re doing all the right things on your side to protect your company. Once again, this doesn’t mean spending a huge amount on hiring an IT team. Yes, this would be helpful, but for new SMEs trying to allocate their budget in the right places, it isn’t always feasible. Instead, you can start by using strong, unique passwords and multi-factor authentication. Across the business, you need to make sure that all employees are using strong passwords and implementing MFA wherever possible, adding an extra layer of protection from the outset. 

You should also be implementing firewalls and antivirus software, specifically tools like Norton, McAfee, or Bitdefender, all of which provide robust protection against malware, viruses, and cyber breaches. Once implemented, make sure that they are regularly updated and any vulnerabilities are patched. With cybercriminals often exploiting outdated software to infiltrate networks, keeping everything up to date can be the difference in whether these tools remain effective and your company remains safe. 

Another important step is to educate your team on the dangers that are facing them. In another recent study, it was found that the majority of data breaches – from 80% to 95% – could be attributed to human error, with employees clicking on phishing links, mismanaging sensitive, or using weak passwords. The frustrating thing about this is that it can be so easily avoided. All you have to do is educate your team on the best cybersecurity practices, raising awareness about the problem while training them to recognise suspicious links, social engineering tactics, and phishing emails. 

You should also make sure to continue this education, training your team regularly as the cybersecurity landscape changes, and making sure they know exactly what to look out for and how to deal with it. Doing this – along with attaining business insurance should your defences fail – will give you the best chance possible to fight against cybercriminals, ensuring their efforts are doomed from the start.

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