- Increased Christmas and summer trading could leave both online and brick-and-mortar retailers at risk for a cyberattack.
- 89% of Australian shoppers plan to shop both online and in-store, with 56% of their shopping to be done online.
- With 78% of shoppers forecast to complete their Christmas shopping before 1 December, brokers may need to address retail SMEs’ cyber exposures early.
Online shopping looks to be bigger than ever this Christmas. While 89% of shoppers in a recent CPM Australia survey intend to shop both online and in brick-and-mortar stores, they plan to do over half (56%) of their shopping online, up 3% from 2023.
Coupled with 76% of consumers surveyed planning to spend the same or more on Christmas than they did last year, many retailers are expecting a busy summer trading season.
While this is welcome news for retail businesses, it may bring added risk.
“Cyberattacks are an often-overlooked business exposure for SMEs, and the Christmas period only increases their risk,” says Grant Williams, Head of Intermediated Business at insurtech platform BizCover for Brokers. “Now may be the right time for brokers to reach out to their retail clients and have the ‘Cyber Insurance conversation’.”
For small retailers, e-commerce presents clear risks. Online sellers are tasked with collecting, transmitting, and storing customer payment details which are valuable to cybercriminals. Yet, many SMEs don’t think they are at risk, despite making up an estimated 43% of cyberattacks in Australia according to one study.
Retailers may be especially vulnerable to some attacks. Data from the Australian Signals Directorate (ASD) reveals that the industry accounted for over 16% of ransomware attacks, making it the second-most targeted industry in FY23.
At the same time, SMEs that do not offer online sales could also fall victim to a cyber incident.
Williams explains, “Brick-and-mortar retailers often think they are immune to cyberattacks because they don’t sell online. However, many everyday business activities can leave them vulnerable.”
Cybercriminals use a variety of methods to target small businesses, from phishing emails and false billing scams to ransomware and system hacks. Seemingly innocent activities, such as emailing suppliers or accepting EFTPOS payments, can be exploited.
Given the expense of cyber incidents for small businesses (the ASD reported an average cost per incident of $46,000 in FY23), Cyber Insurance could be a crucial addition to an SME’s business insurance portfolio.
“Cyber Insurance can help small businesses manage the costs of a cyberattack, like investigating the cause and notifying affected customers,” says Williams.
Many Cyber policies also include 24/7 incident response services that can provide the insured with crucial assistance in the aftermath of a cyber incident.
He continues, “Often, small business owners don’t know who to turn to following a cyberattack. If the incident has left them unable to trade, the business could lose revenue and customers. It’s the last thing a retailer would want over Christmas, which for many is their most profitable quarter.”
Incident response services connect the insured with assistance in containing the damage of an attack and getting back to business as usual as quickly as possible—a key benefit during what is often the busiest trading period of the year for many retail businesses.
As the Christmas shopping season fast approaches, brokers may want to address cyber exposures with their retail clients sooner rather than later—CPM Australia’s survey reveals that 78% of Australian shoppers will have completed their Christmas shopping by the end of November.
“Christmas shopping starts early, and cybercriminals don’t take holidays. Brokers can help their retail SMEs manage cyber risk now and protect them all year long with Cyber Insurance.”
BizCover for Brokers acts as agent of the insurer and not as the agent of you or your client. Any advice provided is general advice only and does not take into account the personal objectives, financial situation or needs of you or your client. Always read the Product Disclosure Statement or Policy Wording (available on our website).
© Copyright 2024 BizCover Pty Limited. BizCover for Brokers is a business name of BizCover Pty Ltd (ABN 68 127 707 975; AFSL 501769).
About BizCover for Brokers
BizCover for Brokers is a full lifecycle platform for business insurance that streamlines the end-to-end process when servicing their SME clients. Created by brokers for brokers, the platform empowers brokers by increasing efficiency.
The B4B platform boasts a broad appetite across eight products covering over 6,000 occupations. With a single data entry, brokers can compare multiple quotes for multiple products from multiple insurers and bind in minutes. Every broker on the B4B platform also has access to our dedicated Customer Support team for additional assistance when they need it most.
Media Contact
Adriana Rey
adrianar@bizcover.com.au
0431 537 874