Top 5 Cybersecurity Recommendations for Small Businesses in 2025

The new year is here and the cybersecurity landscape for small businesses continues to evolve rapidly. While larger organizations have dedicated teams and robust budgets to handle cyber threats, small businesses are often more vulnerable due to limited resources and awareness. Cybercriminals know this, and many target smaller businesses with fewer defenses in place. However, there are simple, effective steps every business can take to strengthen its cybersecurity and protect sensitive data.

Let’s explore the top five cybersecurity recommendations every small business should implement in 2025 to ensure its readiness in a constantly changing threat environment. These practices, when combined with a solid cyber insurance policy, can significantly reduce the risk of a cyber attack and help mitigate the financial impact if one occurs.

1. Educate Employees on Cybersecurity Awareness

Your employees are the first line of defense against cyber threats. In fact, human error is often the primary cause of data breaches. Phishing attacks, where attackers trick employees into revealing passwords or sensitive data, remain one of the most common ways cybercriminals infiltrate small businesses.

Why it’s important: Cybersecurity is not just an IT issue; it’s a business-wide responsibility. According to a report by the Cyber Readiness Institute (CRI), employees must be regularly trained to recognize and respond to potential threats. Even small actions, like clicking on a suspicious email link or using weak passwords, can lead to devastating breaches.

What to do: Implement an ongoing training program to raise awareness of the most common cyber threats, such as phishing, password fatigue, and social engineering. Training should be tailored to different roles within the organization, ensuring all employees understand their responsibilities in protecting sensitive business information. Regular phishing simulations can also help employees spot malicious emails before they cause harm.

The importance of creating a culture of cybersecurity cannot be overstated. In addition to formal training, consider distributing cybersecurity guidelines and best practices on a regular basis. This could include reminders about how to spot phishing emails, how to securely share files, and the importance of locking computers when not in use.

Tip: Consider cybersecurity certification programs like Cyber Essentials, which provide structured training and clear guidelines on maintaining secure systems. These can help to elevate the overall awareness and understanding of cybersecurity across the entire organization.

2. Strengthen Network Security with Firewalls and Encryption

One of the simplest and most effective ways to protect your business is to secure your network. A robust firewall serves as a barrier between your internal network and the outside world, while encryption helps ensure that sensitive data is protected both during transmission and at rest.

Why it’s important: In 2023, the FBI reported that business email compromise (BEC) and ransomware attacks were among the most costly and disruptive to businesses of all sizes. Encryption and firewalls can help mitigate the damage caused by these types of attacks by protecting the data before and after a breach.

A firewall works by monitoring and controlling incoming and outgoing network traffic based on predetermined security rules. It can prevent unauthorized users from accessing your internal network, especially when it comes to remote work setups. Similarly, encryption secures communications, ensuring that any intercepted data remains unreadable without the decryption key.

What to do: Ensure your business uses a firewall to block unauthorized access to your network. Additionally, implement encryption protocols for emails, files, and customer data. This is especially crucial for businesses that handle personal or financial information, such as health or legal services.

As the digital landscape grows increasingly complex, securing your network involves more than just installing a firewall. Make sure it is properly configured and updated regularly. You should also monitor your network continuously to detect and respond to any unusual activity. Employing tools like intrusion detection systems (IDS) can help identify malicious traffic before it causes significant damage.

Tip: Use a Virtual Private Network (VPN) for employees who work remotely or travel frequently. A VPN encrypts internet traffic, ensuring secure connections even on unsecured networks like public Wi-Fi.

3. Implement Multi-Factor Authentication (MFA)

In 2025, simply relying on passwords to protect accounts is no longer enough. Multi-factor authentication (MFA) adds an additional layer of security, requiring users to provide two or more verification factors before accessing an account or system.

Why it’s important: A study by the National Cyber Security Centre found that 80% of data breaches could have been prevented by implementing MFA. Passwords can be easily compromised, but with MFA, even if a hacker obtains your password, they cannot gain access without the second authentication factor, such as a fingerprint or a code sent to a mobile device.

MFA enhances security by ensuring that the person accessing the account or system is authorized, not just because they know a password. This is especially important for systems that store sensitive data, such as financial records or intellectual property.

What to do: Implement MFA across all business systems and applications that support it, especially for accessing sensitive data or performing financial transactions. Popular MFA methods include SMS codes, email links, and app-based verifications (like Google Authenticator).

In addition to systems and applications, consider implementing MFA for accessing your company’s internal resources, such as file servers or cloud storage services. The more layers of security, the better.

Tip: Enforce the use of strong, unique passwords for all employees, and combine this with MFA to ensure that even the most secure passwords cannot be bypassed.

4. Use Endpoint Detection and Response (EDR)

Endpoint Detection and Response (EDR) is a security solution designed to monitor and protect devices (endpoints) like computers, smartphones, and servers. EDR systems are designed to detect and respond to potential threats in real-time, helping businesses identify and mitigate attacks before they cause significant damage.

Why it’s important: Traditional antivirus software is no longer enough to protect businesses against advanced persistent threats. Cybercriminals are using more sophisticated methods to breach systems, often evading detection by traditional security tools. EDR solutions provide real-time monitoring, advanced threat detection, and automated responses to suspicious activities.

What to do: Invest in an EDR solution that provides continuous monitoring and threat intelligence. These systems use machine learning to detect and respond to anomalies, even those that might evade standard firewall or antivirus systems. If your business is not equipped to handle the deployment and management of EDR, consider outsourcing to a managed security service provider (MSSP).

Tip: Make sure to integrate EDR with other security measures like firewalls and MFA. This layered approach ensures that you can detect threats quickly and respond before they escalate into more serious issues.

5. Backup Critical Data Regularly

A crucial part of any business continuity plan is data backup. Cybercriminals often deploy ransomware to lock businesses out of their systems, demanding payment for the decryption key. Without recent backups, businesses may be forced to pay the ransom or lose valuable data permanently.

Why it’s important: The CRI’s 2024 report highlights that the average cost of a data breach for a small business is significant, not only in terms of direct financial loss but also in the potential loss of customer trust. Having a recent backup ensures that, even if data is compromised, you can quickly recover and continue operations.

Backing up critical data regularly means that in the event of a breach or disaster, you can restore your business operations quickly. Ransomware attacks are a growing threat, but businesses that have effective backup strategies in place are far less likely to be severely impacted.

What to do: Establish a backup protocol to ensure critical business data is backed up regularly to a secure, off-site location or cloud service. Automated backups should be scheduled frequently, with verification that data can be restored easily.

To further reduce the risk of data loss, consider implementing a “3-2-1 backup strategy.” This means having at least three copies of your data, two of which are stored locally but on different devices, and one copy stored off-site or in the cloud.

Tip: Test your backup systems regularly to ensure they function as expected during an emergency. Additionally, consider investing in cyber insurance that includes ransomware coverage to help mitigate the costs of a ransomware attack.

Cyber Insurance: Additional Protection for Your Business

While the above measures are critical for strengthening your business’s cybersecurity defenses, no strategy is foolproof. Cybercriminals are constantly evolving their tactics, and even the most prepared businesses may face a breach. This is where cyber insurance comes in.

Why it’s important: Cyber insurance is a crucial safeguard against the financial consequences of cyber threats. It provides a financial safety net in case of a breach, covering expenses such as legal fees, data recovery, and reputational damage. Cyber insurance can help offset the costs of breach notifications, crisis management, and regulatory penalties.

What to do: Speak with a knowledgeable insurance agent to assess your company’s cyber risks and secure the right cyber insurance policy. Coverage options can include liability for data breaches, ransomware attacks, and even reputational harm.

Tip: Ensure that your cyber insurance policy is tailored to your specific risks and includes coverage for the most likely cyber threats. Understand your policy’s exclusions so you’re not caught off guard in the event of an attack.

The Bottom Line

In 2025, small businesses must stay vigilant and proactive in securing their digital environments. By educating employees, strengthening network defenses, implementing MFA, using EDR, and backing up critical data. Additionally, only considering traditional insurance protection like general liability, commercial property, or a business owner’s policy is not enough. You need to consider investing in cyber insurance, so businesses can protect themselves from the evolving cyber-threat landscape. The key is to recognize that cybersecurity is not a one-time task but an ongoing process that requires continuous attention and improvement.

If you’re looking to ensure your business is cyber-ready, consider consulting with an insurance agency that specializes in cyber coverage. By combining best practices in cybersecurity with the right cyber insurance, you can build a comprehensive protection plan for your business’s future.