October is Cyber Security Awareness Month, so now is the perfect time to examine and refine your business’s cyber security precautions, things like password policies and employee training. It’s also the perfect time to make sure you have a cyber insurance policy.

If you operate a small or midsize business (SMB), this domain of criminal enterprise increasingly has you in its crosshairs.

Why Are SMBs Targeted?

If you’re a small business owner, it may seem odd to imagine criminals targeting you rather than bigger names with bigger revenues. But, with small businesses constituting 44% of American gross domestic product, according to the Small Business Administration, there are logical reasons for the bad guys to pick on the little guys including:

• Low security budget. Smaller companies tend to have smaller security budgets. Often without a dedicated security team or lacking the most up-to-date countermeasures, they can be seen as easier targets than bigger companies with beefier budgets.
• Weak security protocols. Smaller companies are also more likely to have less sophisticated security policies and protocols than their larger counterparts, leaving sensitive information unaddressed and unprotected.
• Gateway to bigger prey. By committing supply chain attacks — exploiting vulnerabilities in small companies that service numerous larger clients — attackers can often get more bang for their cyber-crime buck by gaining illicit access to several victims at once.

Once it’s understood that a smaller market footprint offers no real protection from cyber crime, it’s important to know the ways your business can be targeted. And, given the trends highlighted in the FBI’s March 10, 2023 release of its annual Internet Crime Report, there’s at least one threat everyone should pay attention to: Social Engineering Fraud.

What Is Social Engineering Fraud?

While traditional “hacking” relies on vulnerabilities in software or hardware to gain unauthorized access to networks and computer systems, social engineering fraud relies on people and emotions.

According to the Cybersecurity and Infrastructure Security Agency, socially engineered attacks are those that use “human interaction (social skills) to obtain or compromise information about an organization or its computer systems.”

Such exchanges can take the form of convincing text messages, email and voice interaction capable of duping even cautious employees into disclosing sensitive information — especially when combined with powerful emotions like fear, love and urgency.

Social Engineering: 10 Types of Fraud

As criminals attempt to leverage technology, trust and emotion against you and your team, familiarity with their techniques can help you avoid becoming a victim. Popular techniques for this ever-evolving type of fraud include:

• Baiting. Baiting attacks tempt victims into reusing passwords with offers of quick or easy access to goods and materials or by luring them into inserting USB flash drives to install malware.
• Business Email Compromise (BEC). Among the most costly and difficult-to-detect social engineering attacks, BEC uses executive impersonation to direct subordinates to perform fraudulent funds transfers.
• Diversion Theft. An old tactic adapted for contemporary use, victims of diversion theft attacks are tricked into sending or obtaining sensitive information to/from a spoofed location or person.
• Honeytrap. Often used with romantic overtones, the honeytrap uses a counterfeit online profile to deceive a victim into disclosing information to what she or he believes is a real person.
• Phishing. These attacks use email or a counterfeit website from a seemingly trustworthy source about topics of broad interest to solicit personal information from a large pool of people.
• Pretexting. Impersonating an authoritative or trustworthy source, a pretexting attack will ask for personal information that can be used either to directly gain unauthorized access or further impersonate its initial victim in a subsequent attack on the intended target.
• Quid Pro Quo. Usually posed as a bogus offer for a valuable service (like improved network speed or updated software), a quid pro quo attacker asks for login credentials as a precondition.
• Smishing. Easy and cheap to set up and perform, smishing uses malicious links sent as text messages in order to lure victims to fraudulent websites for malware installation.
• Tailgating. Sometimes referred to as “piggybacking,” the tailgate attack is an in-person exploit that solicits seemingly trivial courtesies (e.g. “I forgot my laptop. Can I borrow yours?”) as a means of gaining access to otherwise restricted areas and resources.
• Whaling. These attacks are specialized phishing attacks that target a powerful stakeholder such as a CEO using highly developed personal information rather than general interests.

A common theme in all of these attacks is the use of emotion — for example, the desire to help another person or the fear of being responsible for a costly mistake — as a means of encouraging the victim to grant the attacker access.

What Can I Do About Social Engineering Fraud?

As always, encourage employees to use best practices like creating a strong password and using a VPN when possible to help protect your business data. And, while it’s always a good idea to make sure your security policies and systems are current, there are some important non-technical steps you can take to promote cyber security:

• Understand the threat environment. Dedicate time throughout the year to stay current with authorities like the FBI or the Cybersecurity & Infrastructure Security Agency Knowing about an attack before it’s used on you can make a big difference.
• Communicate with your team. Make sure your team knows about these threats and how to call them out. A quarterly update of the latest scams and threats will keep everyone informed. Encourage your team to question and verify rather than act on fear or urgency. Most cyber crimes are easily preventable with rationality and diligence.
• Get cyber insurance. Review and update your commercial insurance policy to ensure proper coverage. Business owners are discovering that they are either uninsured or underinsured for cyber crime since many insurance companies’ cyber insurance policies don’t cover social engineering claims.However, ERIE offers a cyber insurance coverage that may cover claims arising out of social engineering. As Commercial Lines Product Development Consultant Kristen Stevanus explains, “ERIE’s Cyber Suite coverage addresses a variety of cyber-crime consequences — including things like data breach, misdirected payments and malware — where a policyholder’s employee unwittingly grants access to the attacker.” Cyber Suite coverage with ERIE includes access to additional resources to help business owners protect themselves against cyber threats. With Cyber Suite, customers gets Cyber Safety, a risk management service that provides employee training, cyber security policy templates, website scanning and more.  

  This kind of cyber crime protection addresses more than just the direct effects of the attack itself. Covered claims also include protection for downstream consequences like forensics, compliance and recovery.

Stay Current, Stay Safe

Cyber security is an evolving concern, and keeping up to date with the latest threats is one way to avoid them. But even when you take precautions, cyber fraud can still occur. That’s why it’s so important to make sure you protect your business by having the right insurance protection.

With Cyber Suite from ERIE¹, you’re covered for losses arising from a host of cybercrimes, including data breaches, computer fraud and attacks, cyber extortion, misdirected payment fraud and telecommunications fraud. Cyber Suite also includes third-party liability coverages for privacy incident liability, network security liability and electronic media liability. And as an added bonus, you’ll have access to a team of cyber professionals experienced in handling these types of claims.

A local agent can help you understand the benefits of this important coverage, which is just one reason why it’s beneficial to have a knowledgeable Erie Insurance agent.

¹Cyber Suite is only available to Customers with an ErieSecure Business® policy (not available in NY). Cyber Suite coverage and associated services reinsured under an arrangement with the Hartford Steam Boiler (Home Office: Hartford, Connecticut). © 2021 The Hartford Steam Boiler Inspection and Insurance Company (“HSB”). All rights reserved. This document is intended for informational purposes only and does not modify or invalidate any of the terms or conditions of the policy and endorsements. For specific terms and conditions, please refer to the coverage form.

The insurance products and rates, if applicable, described in this blog are in effect as of September 2023 and may be changed at any time. 

Insurance products are subject to terms, conditions and exclusions not described in this blog. The policy contains the specific details of the coverages, terms, conditions and exclusions. 

The insurance products and services described in this blog are not offered in all states.  ERIE life insurance and annuity products are not available in New York.  ERIE Medicare supplement products are not available in the District of Columbia or New York.  ERIE long-term care products are not available in the District of Columbia and New York. 

Eligibility will be determined at the time of application based upon applicable underwriting guidelines and rules in effect at that time.

For business owners, hiring and retaining good employees is always a challenge. But in today’s highly competitive job market, the task of keeping your workforce engaged and productive is harder than ever.

After a disruptive few years following the COVID-19 pandemic, more and more working Americans find themselves dissatisfied with their current job. In fact, a recent poll from Monster.com found that an astounding 96% of workers are looking for a new position in 2023! Meanwhile, the company also reports that 9 out of 10 employers say they’re struggling to fill positions.

With these trends in mind, your business needs a solid recruitment and retention strategy. And many experts agree that improving employee morale and engagement is the best place to start.

Why? Because not only does employee engagement improve long-term retention, but disengaged employees are estimated to cost the U.S. up to $600 billion in lost productivity each year.

To help your business attract and retain the best people, here are 9 tips to boost employee morale.

1. Offer Competitive Benefits

   Every employee wants to feel like their contribution is valued. So whether you manage a staff of hundreds or are hiring your first employee, offering a competitive compensation and benefits package is one of the most important ways to attract top-performing talent to your organization.

   At the most basic level, this means offering a base pay that reflects the current realities of your local job market. According to Monster, 46% of workers expect a higher salary this year due to inflation and the higher cost of living. If your company’s wages aren’t keeping up with the market, don’t be surprised if employees start job hunting.

   Beyond a competitive annual salary, employees also place a high value on benefits like health insurance, paid time off and retirement contributions. For small businesses, the cost of these benefits can add up quickly. But you may recoup some of that expense in the form of reduced employee turnover.

   After taking a look at your current pay and benefits, don’t forget to publish the details in an employee handbook. This written documentation can help your employees understand the ins and outs of your benefits package – along with what’s expected of them as members of your team.

2. Promote Work-Life Balance

   Another shift that employers are noticing following the COVID-19 pandemic is a higher value placed on work-life balance by employees. To help boost employee morale, your business may want to consider allowing employees to work from home, if possible. A growing number of small businesses are also adopting a hybrid work model – one where employees split their time between working from home and working onsite at a company-owned location.

   If remote work options aren’t realistic for your business, there are still things you can do to promote a better work-life balance for your staff. Offering more flexible schedules or comp time is a great way to acknowledge that employees have a life outside of work, allowing them to make time for friends, family commitments and personal interests. And drawing clear lines between work and home life can be done by discouraging off-hours calls and emails.

3. Be Transparent

   As a business owner, establishing clear lines of communication with your employees is another great way to improve morale and engagement. According to a Slack study on the future of work, 80% of workers want to know more about how decisions are made in their organization, and 87% want their company to be transparent.

   Transparency builds trust between employees and an employer. So when you create an environment where your team members feel free to ask questions – and can receive honest answers – you’ll be more likely to earn their loyalty and commitment.

4. Ask For Feedback

   Speaking of transparency, never underestimate the importance of regularly asking your employees for feedback. All too often, business owners only seek out feedback during exit interviews – after an employee has already decided to leave your company. Using this approach, you’re missing out on tons of valuable insights that can help you improve morale and engagement.

   Create a company culture that’s focused on continuous improvement by routinely creating opportunities for employee feedback. To accomplish this, consider using a combination of internal surveys, employee review sessions and company-wide meetings. Ask your staff about why they choose to stay at your company and what they would change to make life better. Then, use the insights you gain to create a better work environment.

5. Support Wellness Initiatives

   In a recent report from Workhuman and Gallup, employee wellness was found to play a role in reduced levels of burnout, better social wellbeing, higher levels of belonging and an increased feeling of thriving. For that reason, many employers are starting to pay more attention to employee wellness – including the physical, emotional, mental, financial and social wellbeing of their team.

   When you think about it, it makes sense that you can improve morale and productivity by helping your employees make their lives better outside of work. So get creative in thinking of new ways to promote wellness. That could mean offering perks like a free gym membership to incentivize physical activity or enrolling in an employee assistance program to offer mental and emotional health support.

6. Show Your Appreciation

   Sometimes, even small gestures can make a big impact on employee morale. And there are plenty of ways to show your appreciation for a job well done.

   Take time to celebrate special achievements like meeting sales goals, landing a new client or earning a great customer review. Recognition can come in many forms – whether it’s a small gift, a handwritten note or an email to your staff.

   And don’t ignore those business “Hallmark holidays” like Administrative Professionals Day, Employee Appreciation Day or Fun at Work Day. While they’re not always widely celebrated, they present a great opportunity to show your gratitude, improve morale and foster creativity. Injecting fun into your workplace can have positive effects by bringing everyone together. Consider themed food days, games, crafts, awards, etc.

7. Prioritize Team Building

   When you work a full-time job, it can feel like you spend as much time with your coworkers as you do with your own family. So investing in building good relationships at work is an easy way to help improve morale.

   As an employer, consider hosting regular team-building events to bring your employees closer together. This could be as simple as scheduling an after-work happy hour, or planning a fun activity for your staff to do together like an “escape room” event, putt-putt or visiting a local museum. Be creative and ask your employees for ideas, too.

   And if your business employs remote workers, consider bringing them in for in-person meetings once or twice a year. You’ll find face-to-face interactions will help build stronger bonds than a video conference.

8. Offer Performance-Based Incentives

   If you’re looking to improve morale and boost productivity at the same time, consider offering performance-based incentives to your employees. You can do this by tying raises to employee performance reviews, or by creating a profit-sharing structure that offers bonuses based on your company’s financial performance.

   These types of merit-based incentives can keep morale strong – while incentivizing your highest-performing employees to stay with your business for the long haul.

9. Promote From Within

   The next time you have an open management position, take a good hard look at your internal candidates before opting for an outside hire. The truth is, everyone likes to see hard work get recognized and rewarded. Hiring from within sends a message to your employees – letting them know that it’s possible to build a career at your company.

   If you anticipate a skills gap, look for ways to bridge it by offering training or professional development opportunities. Investing in the education and growth of your employees will not only boost morale. It can also result in reduced onboarding costs and increased retention rates.

As a business owner, you’re undoubtedly familiar with the old adage, “it takes money to make money.” It’s a fact that rings true for any new venture. Whether you’re looking to launch a startup, expand your existing service offering or add a second location, it requires an upfront financial investment.

Traditionally, most entrepreneurs have had only a few options for funding their business. They can self-fund their efforts out of their own pocket, raise money from investors or turn to a bank for a small business loan.

But over the past decade, the rapid growth of the internet and social media has paved the way for a new way to raise capital: crowdfunding.

You’ve likely heard stories of successful companies that got their start on popular crowdfunding platforms like Kickstarter or Indiegogo. But is crowdfunding the right fundraising choice for your business? Read on to find out.

What is Crowdfunding?

As its name suggests, crowdfunding involves raising money from a large group of people – called crowdfunders. Unlike a traditional investor, each crowdfunder typically makes a small investment in your business. But when all those contributions are combined, they can add up to a sizable amount of capital.

According to the crowdfunding site Fundly, about $34 billion was raised through crowdfunding platforms globally in 2020. And that number is predicted to triple by 2025!

What Types of Crowdfunding Are Available for Businesses?

While the basic definition of crowdfunding can be applied across the board, crowdfunding platforms differ on how their deals are structured. If you’re considering a crowdfunding campaign for your business, there are four basic types to consider.

1. Debt crowdfunding. This type of crowdfunding functions like a traditional business loan. Your campaign will raise money from individuals, with the expectation that you’ll pay back their investment. Some nonprofit funding platforms, like Kiva, focus on providing interest-free loans for worthy causes. Other debt crowdfunding platforms, also called peer-to-peer lending sites, require you to pay back crowdfunders based on a set repayment schedule and interest rate.
   
2. Equity crowdfunding. If you’re looking for a cash investment that doesn’t need to be repaid, equity crowdfunding may be for you. These types of crowdfunding platforms let individuals invest in your business in exchange for an equity stake in your company. Think of it like a small-scale angel investor or venture capitalist. You set the terms of the deal, and the investment doesn’t need to be paid back like a loan.
   
3. Reward-based crowdfunding. Made popular by companies like Kickstarter, reward-based crowdfunding doesn’t require you to pay back an investment or give up an equity stake. Instead, your crowdfunders will receive some type of benefit in exchange for investing in your campaign. It could be early access to your new product or adding their name to the credits of your new documentary. The rewards and corresponding investment levels are up to you.
   
4. Donor crowdfunding. This type of crowdfunding platform requires you to give nothing in return for a contribution – crowdfunders are simply donating to support your cause. Made popular by platforms like GoFundMe, these types of crowdfunding campaigns typically cater to nonprofits or individuals and businesses facing some type of financial hardship.

What Are the Advantages of Crowdfunding?

• Easy access to capital. Compared to applying for a small business loan or seeking out an individual investor, the barriers to launch a crowdfunding campaign are relatively low. You don’t need a high credit score or an airtight business plan to launch a campaign. You just have to convince others to back your idea.
• Lower interest rates. Depending on the type of crowdfunding platform you choose, you may pay considerably less in interest compared to a traditional bank loan. You could even end up with an investment that doesn’t need to be repaid at all.
• Added publicity. The most successful crowdfunding campaigns are those that generate avid support from their investors. If crowdfunders believe in your cause, they’ll be likely to share your campaign with friends and family – increasing awareness of your business, generating free word-of-mouth promotion and attracting additional investors.
• Low risk. Starting a crowdfunding campaign can be an easy way to gauge the level of support or interest in your new business idea. Because the upfront investment is minimal, there’s no real risk if your campaign flops.

What Are the Disadvantages of Crowdfunding?

• Failed campaigns. Not every crowdfunding effort is successful. In fact, according to The Crowdfunding Center, only 22.4% of crowdfunding campaigns actually reach their investment goals. Depending on the platform you choose, that means you could walk away with nothing.
• Competition. With the growing popularity of crowdfunding campaigns, it’s harder than ever to stand out from the crowd. To launch a successful campaign, you’ll likely need to spend a significant amount of time marketing and promoting your fundraising efforts.
• Fees. While crowdfunding can be a great alternative to more traditional financing options, there’s no such thing as “free money.” Nearly every crowdfunding platform will take a cut of your investment for the use of its services. And you may also have to pay processing fees for donations made using credit cards.
• Tight timelines. Most crowdfunding platforms only give you a limited amount of time to fund your campaign. If you don’t generate enough interest in that time period, you could be left without an investment.

What Should I Know Before Starting a Crowdfunding Campaign?

• Choose the right platform. Because crowdfunding options are so diverse, it can be difficult to give specific advice on the types of projects or initiatives that are a good fit. But regardless of your project, it’s important to pick a platform that aligns with your needs. For example, if you’ve got a great idea for a new business startup, debt or equity crowdfunding platforms may be your best option. Looking to launch a new product? Reward-based crowdfunding can help you earn initial sales along with your upfront investment. Once you narrow down the crowdfunding category, do your research on the platforms that are available. Compare and contrast their services, requirements, reputation and fees. And be sure to check out examples of past success stories. Doing your homework in advance can help increase your chances of crowdfunding success.
• Invest in marketing. To raise an investment through crowdfunding, you’ll need to share your story in an effective and compelling manner. Don’t underestimate the importance of having high quality photos, videos and related content before your campaign launches. If you’re not a marketer at heart, you may want to consider hiring some outside marketing expertise to help you tell your story.
• Protect your intellectual property. If you have an idea for a brand new product or service, promoting it publicly on a crowdfunding platform could allow someone to steal your idea. And if they can bring it to market faster than you, it might take a lengthy (and expensive) legal battle to make things right. If protecting your intellectual property is a concern, it may be worth checking into your options for securing patents, copyrights or trademarks first.
• Use your social network. The success of your crowdfunding campaign will depend, in large part, on your ability to spread the word. Be sure to lean into your personal and professional networks – both in person and on social media platforms. And don’t be afraid to ask your friends and family to share your campaign to help you reach your goals.
• Know the tax implications. Before you launch your crowdfunding campaign, it’s important to understand how any contributions may impact your year-end tax bill. As far as the IRS is concerned, the money you earn from crowdfunding will generally be taxed as income during the year you receive it. This is especially true if crowdfunders have received anything in return for their contribution. Of course, the tax implications for your exact situation may vary – so it’s best to get counsel from an attorney, accountant or tax professional.