The Top 5 Ways Small Businesses Increase Their Cyber Liability Without Realizing It

Most small business owners don’t think they’re sitting on a cyber liability time bomb. But in our work with clients across industries, we’ve found that the riskiest exposures usually aren’t high-profile breaches—they’re overlooked business practices that quietly create legal, financial, and reputational risk.

Here are the top 5 ways small businesses increase their cyber liability—without even realizing it:

1. Relying on Generic IT Providers for Cybersecurity

Your managed IT provider may be great at keeping the Wi-Fi running and installing updates—but that doesn’t mean they’re addressing your legal and insurance exposure. If your security controls don’t meet the standards your cyber insurer expects, you may be on your own after a breach.

⚠️ Liability trigger: Insurance claim denials due to inadequate controls or lack of documentation.

2. Not Requiring Cybersecurity from Vendors

Your business might be tight on security—but what about your bookkeeper, law firm, or marketing agency? If they handle sensitive data and get compromised, you could still be liable.

⚠️ Liability trigger: Regulatory investigations or customer lawsuits stemming from third-party breaches.

3. Using Personal Devices Without Controls

Remote work has blurred the line between business and personal devices. If your team accesses company data on personal phones or laptops—without mobile device management (MDM), encryption, or password controls—you're exposed.

⚠️ Liability trigger: Data loss or breach from stolen or infected devices, with no audit trail.

4. Ignoring Contractual Cyber Clauses

Increasingly, contracts from enterprise clients, banks, or partners include cybersecurity and indemnity clauses. Signing without understanding your obligations—or failing to meet them—can lead to breach of contract claims.

⚠️ Liability trigger: Lawsuits or financial penalties tied to contractual noncompliance.

5. Overlooking Email and Document Security

Email remains the #1 attack vector for small businesses. But it’s not just phishing. Poor practices—like sending financial data unencrypted or failing to archive key communications—can create both breach exposure and legal discovery problems.

⚠️ Liability trigger: Privacy violations, lost records in litigation, or unprotected transmission of sensitive information.

What Can You Do?

The first step is visibility. A Cyber Liability Assessment from Bawn identifies where you're most at risk—not just technically, but legally and financially. We help you:

• Close the gaps insurers and regulators care about

• Understand where third-party risk is leaking into your business

• Get defensible documentation to protect you if something goes wrong

You don't need an enterprise budget to reduce your liability. You just need the right intelligence and a few smart changes.

👉 Get Your Cyber Liability Risk Scorecard

Or talk to us for a quick, no-pressure consult.