A guide to encryption for small businesses

Cyber risks have been top-of-mind for many large and small business owners as risks have increased over the years. We released our fourth Hiscox Cyber Readiness Report this year, which found that the median cost of a cyber incident rose from $10,000 last year to $50,000 this year. It’s a dramatic jump, but it’s just one of the reasons that businesses are seeing an increase in cyber risk.

Another reason for the increase in cyber risk is the pandemic. Once shelter-in-place orders were enacted and most businesses required employees to work remotely, there was a rush of cyber and phishing scams.

There are a few different ways that businesses are mitigating these increasing risks, and one of them is looking to encryption solutions. 

Use this guide to better understand encryption and why it could be crucial to fighting cyber crime in your business.

What is encryption?

Encryption is a way to encode sensitive information so that cyber criminals, even if they were to get their hands on your sensitive data, would not be able to read it. How does encryption work? It uses a secret key that scrambles the letters and numbers in a document making it unreadable to someone who does not have the key. 

How is encryption used?

Encryption is used to protect all kinds of sensitive data. For example, an encryption code disguises information in a file on your computer so that anyone who doesn’t have the decryption key can’t read it. You can also choose to encrypt a whole set of files and folders. It gets more complicated the more data you want to encrypt. For example, you can apply “full-disk” encryption which means that you’re encrypting every piece of information, folder, file, on an entire drive. 

Why do businesses use encryption?

There are many reasons that businesses use encryption. If you collect sensitive personal information about customers, such as birthdays, social security numbers, or credit card information, you should protect that information from hackers. Without encrypting it, you leave yourself vulnerable to a breach, which would have the information of your customers ending up in the wrong hands, and then you face a potential lawsuit. 

The same could happen if a device like a laptop or phone that you use for work is stolen.

Encryption is particularly helpful in protecting sensitive data over email. Here are some email security tips for small businesses.

Encryption tips

One of the most important things to know about using encryption is that if you forget your password or lose your decryption key, you may not be able to retrieve the data. 

Turning on encryption on most devices is easy. It just depends on the type of device you’re using (IOS, Android, or Windows). Use this encryption guide for steps to turn encryption on for your devices. 

Additional ways to fight cyber crime

Many businesses take data protection one step further by getting cyber security insurance. A cyber security policy can protect you if any of the following situations occur:

•    Lost business revenue due to a breach or extortion threat
•    Money lost due to a phishing incident 
•    Lawsuits and regulatory fines 
•    And more

For more ways to protect your business and make sure you’re prepared for the future, check out the Protect Your Business page.