Here are the five cyber risks most likely to affect your business right now – and what you can do about each one.

1. Ransomware

Ransomware is malicious software that locks you out of your own systems and demands payment to restore access. Attackers typically get in through a phishing email, an unpatched software vulnerability, or stolen login credentials. Once inside, they can encrypt your files, your backups, and anything else they can reach.

For small businesses, a ransomware attack can mean days or weeks of downtime – lost revenue, frustrated customers, and a costly recovery process. Some businesses never fully recover.

Cyber insurance with ransomware coverage pays for the ransom, the forensic investigation, and the cost of restoring your systems. It also gives you access to an incident response team who handles the situation on your behalf.

2. Funds transfer fraud

Funds transfer fraud – also called business email compromise – happens when a criminal impersonates someone you trust to trick you into sending money to the wrong account. It might look like an email from your CEO asking for an urgent wire transfer, or a message from a supplier saying their banking details have changed.

This type of fraud is devastatingly effective because it exploits trust rather than technology. No malware required – just a convincing email and a moment of distraction. Losses range from thousands to hundreds of thousands of dollars, and money wired internationally is rarely recovered.

A verification process – calling the requestor on a known number before processing any large transfer – stops most attempts before they succeed. Cyber insurance with funds transfer fraud coverage provides a financial safety net for the ones that get through.

3. Data breaches

If your business stores customer information – names, email addresses, payment details, health records, or anything else that could identify a person – you have data that criminals want. A data breach happens when that information is accessed, stolen, or exposed without authorization.

The consequences go beyond the breach itself. Under Canadian privacy law, businesses are required to notify affected individuals and report certain breaches to the Office of the Privacy Commissioner. Failure to do so can result in significant fines. And if customers sue, the legal costs can be substantial.

Cyber insurance covers the cost of breach notification, legal defense, regulatory fines, and credit monitoring for affected customers – so you’re not absorbing those costs alone.

4. Phishing attacks

Phishing is the most common entry point for cyberattacks. It involves sending fake emails, text messages, or websites designed to trick employees into handing over login credentials, clicking malicious links, or downloading infected attachments.

Modern phishing attacks are sophisticated. They mimic legitimate services your team uses every day – Microsoft 365, your bank, Canada Post, even your own IT department. A single employee clicking the wrong link can give an attacker full access to your systems.

Multi-factor authentication (MFA) is one of the most effective defences against phishing – even if credentials are stolen, attackers can’t get in without the second factor. Regular employee awareness training is also critical. Coalition’s Security Awareness Training helps your team recognize and report phishing attempts before they cause damage.

5. Third-party and supply chain attacks

Your business doesn’t operate in isolation. You use software, services, and suppliers – and each one is a potential entry point for attackers. A supply chain attack happens when criminals compromise a vendor or software provider you rely on to get access to your systems.

These attacks are particularly hard to defend against because they come through trusted channels. You may have strong security in place – but if your payroll software, cloud storage provider, or IT support firm is compromised, your business can be affected too.

Reviewing the security practices of key vendors, keeping software updated, and limiting what access third parties have to your systems all reduce this risk. Cyber insurance covers losses resulting from third-party failures, giving you a financial backstop when the risk comes from outside your control.

How to protect your business from cyber risks

You don’t need to solve every cyber risk at once. Start with the basics:

• Enable multi-factor authentication on all business accounts
• Train your team to recognize phishing emails
• Keep software and systems updated and patched
• Have a verification process for any wire transfer or banking change request
• Back up your data regularly and store backups offline or offsite
• Review what access your vendors and suppliers have to your systems

The cyber risks Canadian small businesses face aren’t going away — but they are manageable. Make sure you have cyber insurance in place. Not because you expect the worst — but because the right policy means that if something does happen, you have the financial support and expert help to get through it.

It might show up as an email that looks like it’s from your CEO, asking the accounting team to process an urgent wire transfer. Or a message that appears to be from a vendor you pay regularly, letting you know their banking details have changed. The email looks legitimate. The request seems reasonable. By the time anyone realizes something is off, the money is gone.

Why it works

Funds transfer fraud is effective because it exploits trust rather than technology. Unlike ransomware that requires breaking into your systems, this type of fraud often needs nothing more than a convincing email and a moment of distraction.

Criminals research their targets in advance – using publicly available information to understand your business relationships, your communication style, and your payment process. The messages they send can be surprisingly convincing.

What it costs

Funds transfer fraud is one of the most common causes of cyber insurance claims in Canada. Individual incidents range from a few thousand to hundreds of thousands of dollars – and money wired internationally is often very difficult to recover.

For small businesses, even a single incident at the lower end of that range can be financially devastating – especially without insurance coverage in place.

How to reduce your risk

The most effective defence is a simple verification process:

• Require that any funds transfer over a certain amount (say, $10,000 or $25,000) be verbally confirmed with the requestor using a known phone number – not one provided in the email
• Train your team to be skeptical of urgency. Fraudulent requests often come with pressure to act quickly and quietly.
• Verify any change to a vendor’s banking details with a phone call before you process a payment

These steps cost nothing. They stop most fraud attempts before they succeed.

What cyber insurance covers

If your business falls victim despite taking reasonable precautions, a cyber insurance policy with funds transfer fraud coverage can help recover some or all of the loss – up to your policy’s sublimit for this type of claim.

Sublimits vary between policies, so it’s worth asking specifically about the funds transfer fraud limit when comparing options. Make sure it reflects the size of transactions your business actually processes.

The bottom line

Funds transfer fraud is one of the easiest cyber risks to defend against with the right process in place – and one of the most expensive when that process isn’t there. A combination of employee awareness, verification procedures, and solid cyber insurance gives your business real protection against this very real threat.