Small businesses handling customer data or digital payments may need cyber risk insurance as breach rates stay high. The Identity Theft Resource Center’s 2025 Business Impact Report found that 81% of small businesses surveyed reported a security breach, a data breach, or both in the last year.
Shawn Silver, founder and CEO of Payment Nerds, said cybercriminals target openings rather than company size. “Cybercriminals aren’t looking for the biggest company.” He added, “They’re looking for a way in, and a small business can be perfect.”
Payment Nerds and high-risk firms
Silver said any company that processes digital payments or handles customer data has exposure. He said, “Any company that processes digital payments or handles customer data has exposure.” He also said, “We tend to see businesses across e-commerce, subscription models, healthcare and telemedicine, professional services, and other large-scale digital transactions as highly targeted,” which puts online retailers, digital service providers, accountants, financial services firms, consultants, graphic designers, writers, and real estate professionals in the same risk lane.
For consultants, the risk can reach beyond a single transaction. Silver said email inboxes and shared drives can hold strategy documents and client financials, which can make client data exposure costly when an account is compromised.
Identity Theft Resource Center report
The Identity Theft Resource Center found that 63% of breached small businesses suffered losses of $250,000 or more. That scale of loss helps explain why cyber liability insurance is part of the conversation for firms that store payment details, customer records, or other sensitive files.
Cyber liability insurance can help cover some costs tied to data breaches, ransomware, or hacking, while professional liability insurance is aimed at claims tied to professional mistakes or advice. The distinction matters for firms that handle both services and sensitive data, because one policy type does not replace the other.
ERGO NEXT survey
ERGO NEXT surveyed 501 small business owners in 2026 and found that 27% ranked a cyberattack or data breach among their top concerns. The same survey found that 31% said it was the risk they felt least prepared to handle, leaving many owners aware of the threat but not ready for the financial hit.
Silver said small businesses are already dealing with phishing and stolen credentials, account takeover, ransomware, payment fraud, and compromised customer data. The FBI’s Internet Crime Report showed business email compromise caused about $3 billion in reported losses in 2025, a figure that matches the kind of email-based fraud Silver described.
For a small business owner, the practical decision is whether the company holds enough digital information, payment flow, or client data to justify cyber risk insurance before a breach does the math first.
