This tale is a rarity. Typically, only a small percentage of small and midsized businesses buy cyberinsurance. Even tech firms, who should be aware of the risks, often take a pass. Instead, most firms will buy a general-liability policy that does not protect them in a situation like this.
That's a big mistake. The Global Entrepreneurship Index, released this week in connection with Global Entrepreneurship Week, found there is a strong correlation between a country's ranking on the list and its digital evolution. A big threat to the growth of digitally enabled businesses is cyberattacks.
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Many entrepreneurs give little thought to hackers when they expand internationally, because they think their companies are too small to interest cybercriminals, but they are actually very vulnerable. Attacks targeting businesses with fewer than 250 employees have been on the upswing the past five years, and in 2015, 43 percent of all cyberattacks targeted small business, according to Symantec's 2016 Internet Security Threat Report, released earlier this year. That number rose from 18 percent in 2011.
It's not just companies' customer information that is at risk. Their intellectual property can be stolen, too — devastating the potential valuation of a start-up. That is not to mention the reputational damage that can occur. I don't know of any way companies can protect themselves from cyberattacks 100 percent of the time, but by insuring themselves against a breach, start-ups stand a good chance of recovering if the worst happens.