Imagine walking into your office tomorrow morning and discovering that nothing works.
Your computers are locked. Customer records are inaccessible. You can’t process orders, send invoices, or access your scheduling system.
Your business has been hit by a cyberattack.
While your IT team works to restore operations, your expenses continue. Payroll is due. Rent needs to be paid. Customers are waiting.
For a small business, even a few days of downtime can become a serious financial problem.
And here’s the question many business owners overlook:
Who pays for the income your business loses while everything is shut down?
Real Businesses. Real Financial Consequences.
Cyberattacks don’t just affect large corporations. Small, independently owned businesses can experience devastating interruptions, often without the financial resources to absorb prolonged downtime.
Case 1: SEC Info – A California Small Business Lost More Than a Year of Operations
In 2021, SEC Info, a small California-based online information services business, experienced a ransomware attack that encrypted essential data and operational software.
The owner initially believed restoring the systems would take a few weeks.
Instead, the business remained offline for more than a year.
Customers canceled subscriptions, recovery required tens of thousands of dollars, and the owner estimated a six-figure loss in subscription income.
The business eventually reopened, but the financial consequences extended far beyond the initial attack.
The lesson: Even a very small company can face months of lost income when essential technology becomes unavailable.
Case 2: Susquehanna Glass – A Family-Owned Manufacturer Forced to Stop Production
Susquehanna Glass, a family-owned glassware manufacturing business in Pennsylvania, experienced a ransomware attack during its busy holiday season.
Hackers encrypted critical business systems, including financial information, inventory records, and customer data.
Production machinery stopped, and approximately 40 employees were sent home. The attackers demanded $1 million.
Fortunately, recoverable backup data helped the company restore its systems within days, without paying the ransom.
But the incident still resulted in more than $100,000 in recovery and related expenses, including IT services, forensic investigations, and legal assistance.
The company also had to work overtime to fulfill customer orders.
The lesson: Even when a business recovers quickly and refuses to pay a ransom, the financial consequences can be substantial.
What Could a Cyberattack Cost Your Business?
You don’t need to lose $100,000 for a cyberattack to create serious financial pressure.
Consider a small business generating $5,000 in average daily sales.
A five-day shutdown could disrupt $25,000 in expected revenue. Add emergency IT support, temporary operating arrangements, delayed orders, and ongoing business expenses, and the financial impact can grow quickly.
Not all disrupted sales become permanent losses, and lost revenue isn’t the same as insurable lost income. However, the cash flow challenges can be very real.
For smaller businesses with limited reserves, unexpected downtime can affect their ability to pay employees, meet obligations, and serve customers.
How Can Cyber Business Interruption Insurance Help?
Cyber Business Interruption Coverage is designed to help address certain financial losses when a covered cyber incident disrupts business operations.
Depending on the policy, coverage may include:
Lost business income: Eligible income lost during a covered shutdown.
Continuing expenses: Certain ongoing expenses that continue while operations are interrupted.
Extra expenses: Covered costs incurred to minimize downtime or maintain operations.
Third-party interruptions: Some policies cover qualifying disruptions affecting essential external technology providers.
However, coverage is not automatic.
Policies may include waiting periods, specific coverage limits, exclusions, and requirements for documenting financial losses.
It’s also important to understand that traditional business interruption coverage under a commercial property policy may not respond to a cyberattack that causes no physical property damage.
Three Questions Every Small Business Owner Should Ask
1. Could my business financially survive a week without its systems?
Consider payroll, rent, recurring expenses, and how much income depends on uninterrupted access to technology.
2. Does my current insurance cover cyber-related business income losses?
Review whether your policy includes Cyber Business Interruption Coverage and understand its limits, waiting periods, and exclusions.
3. Do we have a realistic recovery plan?
Reliable backups, access to IT support, and a clear business continuity plan can help reduce the length and financial impact of an interruption.
Protect Your Business Before an Interruption Happens
A cyberattack isn’t just a technology problem. It can quickly become a financial emergency, particularly for a small business that depends on steady daily operations.
Understanding your insurance coverage before an incident occurs can make a meaningful difference.
At Nickerson Insurance Services, Inc., we help small business owners evaluate their commercial insurance needs and understand the protection available for cyber-related business interruptions.
Coverage is subject to the terms, conditions, limits, waiting periods, and exclusions of the applicable insurance policy.
Sources
Los Angeles Times, July 27, 2022. A ransomware attack almost wrecked his business – SEC Info ransomware incident.
Fortune, April 16, 2026. Small Business Owner on the Hidden Costs of Ransomware – Susquehanna Glass ransomware incident.
