Is your business prepared to recover from a cyber incident

Every October, Cybersecurity Awareness Month encourages businesses to take a closer look at how they protect their people, systems, and data.

This year's theme, "Your Best Defense is You," is a timely reminder that most cyberattacks don't begin with sophisticated hacking. Instead, they take advantage of common vulnerabilities such as weak passwords, unpatched software, or convincing phishing emails.

While reducing cyber risk is essential, businesses should also consider an equally important question: if you arrived at work tomorrow and your systems were locked by a cyberattack, what would the next 48 hours look like for your business?

For many organizations, the greatest financial impact of a cyber incident isn't the breach itself. It's the operational disruption that follows when employees can't access systems, serve customers, process transactions, or continue day-to-day operations.

Small businesses are a target

Many small and medium-sized businesses assume cybercriminals are focused on large corporations. In reality, businesses of all sizes face cyber risks.

AI has become a valuable tool for improving efficiency and productivity, but cybercriminals are also using it to automate attacks and scan thousands of organizations for vulnerabilities at once. Rather than targeting a specific company, they're often looking for the easiest path in. Organizations with limited cybersecurity resources, outdated systems, or weaker security controls can become attractive targets.

While cyber threats continue to evolve, many claims stem from a relatively small number of causes. According to the 2026 NetDiligence Cyber Claims Study, which analyzed more than 10,000 cyber insurance claims, ransomware and business email compromise remain the two leading causes of cyber losses for small and medium-sized enterprises (SMEs), together accounting for roughly half of SME claims over the past five years and nearly two-thirds of SME claims in 2025 alone.

The good news is that many of these risks can be reduced through strong cybersecurity practices, employee awareness, and incident response planning.

At the same time, advances in AI are making cyber threats more sophisticated. Today's phishing emails, fake invoices, and impersonation attempts can be almost impossible to distinguish from legitimate communications. According to Microsoft, AI-generated phishing emails are significantly more effective than traditional phishing attempts, making them increasingly difficult for employees to identify. Traditional warning signs, such as spelling mistakes or poor grammar, are no longer enough.

Five ways to make your business a harder target

Cybersecurity doesn't need to be complicated. Focusing on a few fundamental practices can significantly reduce risk.

• Enable multi-factor authentication (MFA). MFA adds an extra layer of protection by requiring users to verify their identity through a second method, such as a mobile device or authentication app. It's one of the most effective ways to prevent unauthorized access to business accounts.
• Use strong, unique passphrases. Password reuse remains one of the most common security vulnerabilities. The National Institute of Standards and Technology (NIST) recommends using passphrases of at least 16 characters and avoiding unnecessary password changes unless credentials have been compromised.
• Verify requests involving money or sensitive information. Fraudulent payment requests and business email compromise scams continue to rise. Before transferring funds or sharing sensitive information, establish a process to independently verify requests through a trusted phone number or secondary communication channel.
• Invest in employee awareness. Employees are often the first line of defense. Regular training can help them recognize phishing attempts, social engineering tactics, and other common cyber threats.
• Keep systems up to date. Software updates frequently include security patches that address known vulnerabilities. Keeping systems current is one of the simplest ways to reduce exposure to cyber threats.

Strong cybersecurity practices help reduce risk, but no organization can eliminate it entirely. That's why organizations need to think beyond prevention and focus on resilience.

What's the financial impact?

The financial impact of a cyber incident often extends beyond the immediate breach itself. Lost productivity, operational disruption, and business interruption can significantly increase costs. NetDiligence's study also found that SME claims involving business interruption resulted in average incident costs more than five times higher than claims that did not involve business interruption.

That's why businesses should look beyond cybersecurity alone and focus on cyber resilience: the ability to respond to, recover from, and continue operating after a cyber incident.

Cyber resilience starts with a plan. If your organization experienced a ransomware attack, data breach, or system outage tomorrow, would your team know what to do? Who would you contact? How would you communicate with customers? How would you keep your business operating? These are important questions to consider before an incident occurs.

How cyber insurance supports recovery

Cyber insurance is not a replacement for strong cybersecurity practices. Instead, it forms an important part of a broader risk management strategy.

A cyber incident can create challenges that extend far beyond restoring systems. Businesses may face operational disruptions, lost revenue, legal expenses, notification requirements, reputational concerns, and regulatory obligations.

Depending on the coverage selected, a cyber insurance policy may help provide access to resources such as:

• Incident response and forensic investigation services
• Breach coaches and legal support
• Business interruption coverage
• Cyber extortion and ransomware coverage
• Data breach notification support
• Third-party liability protection
• Crisis communications assistance

Just as important as purchasing coverage is understanding how it works. Reviewing your policy regularly can help ensure your coverage aligns with your organization's evolving risks and responsibilities.

Making Cybersecurity Awareness Month Count

Cybersecurity Awareness Month is a valuable reminder that protecting your business requires more than strong passwords and updated software.

This October, consider taking a few practical steps:

• Confirm multi-factor authentication is enabled wherever possible.
• Review your incident response procedures.
• Identify gaps in your cybersecurity controls.
• Ensure employees understand how to recognize and report suspicious activity.
• Review your cyber insurance coverage and understand what's included.

The businesses that recover most effectively from a cyber incident aren't necessarily those that avoid every threat. They're the ones that have reduced their risk, prepared for the unexpected, and developed a plan to recover quickly when disruption occurs.

If you'd like to better understand your cyber risks and coverage options, contact us today . A Westland business insurance advisor can help you assess your needs and explore solutions that support your organization's cyber resilience.

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