Bring your own device (BYOD) security risks for small businesses
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Many small business owners are drawn to the “bring your own device” concept because, on paper, it appears to benefit everyone. Companies save money on hardware and support, while employees enjoy more flexibility using devices they’re familiar with, which boosts morale and productivity.
But lurking beneath the surface of this seemingly win-win policy is a handful of hidden cybersecurity threats that could end up costing your company a lot more in the long run.
Data breaches, malware attacks, and compliance violations can result in significant financial and reputational damage to any small business. Knowing what these vulnerabilities look like can help you protect your business from hackers, adopt security solutions, and implement a response plan in the event of a cyberattack.
- What is BYOD and how does it work?
- What are the main BYOD security risks?
- Why BYOD risks hit small businesses hard
- How can companies protect sensitive data on personal devices in a BYOD environment?
- Cyber insurance can help protect your small business from BYOD security risks
- Get the right cyber insurance from Insureon
What is BYOD and how does it work?
BYOD is when employees conduct business-related activity from their personally owned devices, including laptops, smartphones, tablets, and wearable tech.
Here are a few common instances of BYOD in action:
- A remote employee connecting to the corporate network from their personal laptop
- A sales rep reading work emails on their private smartphone
- A contractor sharing work files from their personal tablet
- An employee saving sensitive company data on their own USB drive
- A manager calling their employees from their smartwatch
What are the main BYOD security risks?
Allowing your employees to work from their own devices often means they’re accessing company information and networks from laptops or smartphones that lack the contract-grade security features or IT oversight that corporate devices provide.
This can open your business up to many threats, including data breaches and compliance violations. Here are some of the security risks of BYOD every business owner should consider:
Lost devices
When you implement a BYOD policy, employees can go anywhere and everywhere, with confidential company data in their back pocket. And, if one of those devices gets forgotten or taken, the stats aren’t working in cybersecurity’s favor—in fact, 91% of lost or stolen devices cause data breaches.
That means the majority of misplaced or swiped smartphones, laptops, and other devices don’t have adequate security measures in place, giving unauthorized users easy access to sensitive information.
Lack of security controls
Corporate-issued devices typically come armed with top-tier security features that most personal devices do not, including:
- Advanced firewalls and contract-grade antivirus software
- Enforced strong passwords
- Multi-factor authentication (MFA)
- IT monitoring of a device’s security protocols and network activity
- Regulating employee activity and watching for malicious apps
Unsecured Wi-Fi networks
Most employees enjoy the untethered flexibility BYOD provides. But when they’re relying on public Wi-Fi networks in airports, hotels, and coffee shops, the BYOD risks instantly multiply.
Though convenient, these unsecured networks make it easy for anyone on the same network to get their hands on your passwords, internet activity, and confidential information.
Network security issues in public places also make you vulnerable to man-in-the-middle (MiTM) attacks. This happens when hackers disguise access points (APs) as public Wi-Fi networks, giving them direct access to your device when you connect.
No formal BYOD policy
To BYOD or not to BYOD? That is the question your employees will have if you fail to establish a formal policy. Not providing clear usage guidelines can disrupt operations and increase security vulnerabilities, causing issues such as:
- Confusion around what employees can store, access, or download
- Lack of oversight about how sensitive data and company systems are being accessed and shared
- Failure to monitor activity across devices, especially if employees are using their own devices against company policy
- Difficulty collaborating across different operating systems
Mixing personal and business information
Using your smartphone or laptop for work and when you’re off the clock can make it extensively more challenging to keep corporate data secure. Here are a few ways that can play out:
- Talking with co-workers on unauthorized messaging apps that lack corporate security controls
- Saving company files to an unsecured personal storage cloud
- Accidentally sending an email with sensitive data from the wrong account
- Clicking on a phishing link in a personal inbox while that device is also connected to the company network can spread malware infections
- Downloading unauthorized apps to do work (shadow IT), including artificial intelligence (AI) software and collaboration tools
- Loaning a personal device to a friend who isn’t authorized for company network access
Compliance and legal risks
Because personal devices typically have weaker security protocols, BYOD can cause significant compliance issues, especially for those working in industries with stricter privacy laws and data protection regulations, such as the Health Insurance Portability and Accountability Act (HIPAA), the Fair Credit Reporting Act (FCRA), and the Gramm-Leach-Bliley Act (GLBA).
Violating these laws can lead to overwhelming fines, lawsuits, and a loss of customer trust.
Malware and phishing attacks
Malware is malicious software that gains unauthorized access to someone’s device to cause damage, disrupt operations, or steal valuable information. For example, ransomware is a type of malware that can encrypt its victim’s files, requiring a ransom payment to regain their data.
Malware attacks typically happen through infected attachments, compromised websites, and phishing emails, although that’s not the only reason for phishing attacks. Hackers can also use them to get sensitive data, such as customers’ credit card information.
As a type of social engineering attack, phishing can come in many forms:
- Phishing: Credible-looking emails try to convince you to share sensitive data or click on malicious links that give malware instant access to your device.
- Voice phishing (Vishing): Phone calls and voicemail messages that try to trick you into sharing private information.
- SMS phishing (Smishing): Text messages that lure you into clicking on malicious links or providing access to confidential information.
Phishing scams are one of the top cyber threats, and personal devices are some of the biggest targets, as they usually lack antivirus protection with the latest security patches.
Data leakage and data loss
In addition to the BYOD security risks listed above, this policy can cause data leaks for a handful of other reasons, including:
- Using unpatched software and outdated operating systems or applications
- Failing to train employees on how to securely handle private company data on their personal devices
- Not having the ability to retrieve company data from an employee’s device after they leave the company
- Sharing a device with family members who don’t have formal permissions to access your company’s information
Evolving security threats
Cybercriminals are relentless, constantly developing more sophisticated ways to attack. And BYOD can make it hard for IT departments to track and get real-time access control to all employee-owned devices, preventing security best practices such as:
- Monitoring network activity and tracking new security concerns
- Ensuring devices are getting software updates on time
- Preventing negligent or retaliatory employees from leaking or sharing confidential information
- Prohibiting unauthorized access with MFA and strong password protocols
Why BYOD risks hit small businesses hard
Most of the data breaches that make headlines happen to large companies with household names. This can lead small business owners to assume a cyberattack would never happen to them, therefore neglecting to implement proper protection for their company.
That’s a big mistake. In fact, this lack of cybersecurity is like sugar on a strawberry, and hackers want a bite.
Right now, roughly 43% of data breaches involve a small business, and they come with a steep price tag, typically costing between $120,000 and $1.24 million.
How can companies protect sensitive data on personal devices in a BYOD environment?
Getting ahead of potential BYOD security incidents requires a rock-solid, well-executed protocol that can sufficiently protect all of your employees’ devices. Here are some critical steps to include in your plan:
- Establishing a formal BYOD policy that clearly defines data security requirements, approved software and apps, and acceptable use for remote work. To keep employees accountable, it’s important to include consequences for noncompliance issues.
- Introducing mobile device management (MDM) tools that let your IT team implement security policies, enforce good password hygiene, monitor application usage, and remotely wipe sensitive data from lost or stolen devices, or when an employee leaves the company.
- Securing system access with strong passwords, a virtual private network (VPN), and multi-factor authentication (MFA).
- Enforce data encryption for any work-related data that’s stored on personal devices, and mandate a secure connection when sharing sensitive information.
- Keeping personal and professional data separate with containerization creates an encrypted space for company apps and data on someone’s personal device. This allows IT to push updates, ensure security patches are applied, and monitor app usage without interfering with personal activity.
- Offering regular employee training sessions to show them how to identify and report security threats, such as phishing emails, implement safe browsing, and maintain security updates on all devices.
- Providing company-issued devices to high-risk roles, such as employees who handle a significant amount of sensitive data, can be much more affordable than a poorly managed BYOD policy.
Cyber insurance can help protect your small business from BYOD security risks
Sometimes, even if you’ve checked every box in the BYOD security policy handbook, your company can experience a nasty cyberattack. That’s when cyber insurance swoops in to save your small business from the significant financial damage a data breach can cause.
There are two types of cyber liability insurance. Understanding what each policy offers can help you determine what kind of coverage your business needs.
First-party coverage, also called data breach insurance, protects your business from the devastating impact a cyberattack can have, including costs for:
- Data breach response measures, such as notifying affected customers.
- Recovering compromised data, including cyber extortion ransom payments.
- Supplementing lost wages during business interruptions.
- Hiring cybersecurity specialists to restore affected systems.
- Consulting public relations services to manage bad publicity.
If you’re accused of failing to prevent (or causing) a data breach at a client’s company, third-party coverage would help pay for your legal defense costs, including attorney’s fees, settlements, and court-ordered judgments.
IT and tech companies should also look into a tech E&O policy. This policy bundle combines errors and omissions insurance with cyber insurance to protect against the risks and legal fees resulting from data breaches.
Get the right cyber insurance from Insureon
Get free quotes for cybersecurity insurance from top-rated insurance providers by filling out our easy online application. You can also speak with a licensed insurance agent, who can answer questions about BYOD security risks and help you find affordable coverage.
Once you find the right policies for your small business, you can begin coverage in less than 24 hours and get a certificate of insurance (COI) for your small business.
