The internet has created a new wave of cybercrime, and made it easier for fraudsters to commit traditional forms of crime. And the move to a digital economy has seen a big increase in crime exposure for businesses large and small.
Is cybercrime a risk for SMEs?
Mid-market companies are under pressure to tap into the online market, but that’s difficult to do without increasing their vulnerability to cybercrime.
Many mid-market companies believe they’re too small to be targeted. But given their limited cybersecurity resources, small and medium-sized firms are seen as a soft target by cybercriminals.
Social media has been a major boon to fraudsters, who use public information to trick people into transferring money to them. Cybercriminals are also actively targeting mid-market businesses, attempting to stealing funds, IT and personal data, as well as resorting to extortion.
How can companies mitigate the risk?
Cybercrime is difficult, if not impossible, to protect against fully.
There is, however, a growing cyber-advice market. Companies are turning to third-party consultants to carry out penetration testing and help identify vulnerabilities.
Crime insurance also has a role to play, especially for mid-market companies with little appetite for such risk.
Specialist cyber-insurance is available, but tends to focus on third-party liability and the cost of dealing with a data breach.
Crime insurance has become a relatively broad form of cover, often protecting against financial losses due to a dishonest employee or third party – whether the crime is online or physical. But not all crime policies are equal when it comes to cybercrime. Some offer much broader cover than others for online losses due to crimes like extortion.
Is traditional crime still a business risk?
Traditional crime has been overshadowed by the rise of cybercrime in recent years. But it’s still very much a business risk.
Incidents of physical crime have not reduced, and they can result in significant losses for a business – running to many millions of pounds.
Dishonest employees, motivated by greed or debt, are the main cause of physical crime. But significant losses can also arise from fraud by third parties, such as misrepresentation of an investment or business venture.
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For further information please contact Mike Parry, Partner, Financial Lines Group on +44 20 7528 4921 or email email@example.com