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What Is Two Factor Authentication And Why Do SMBs Need It?

If you have an Apple ID or a Google account, you’ve probably noticed that every time you attempt to sign into it on a new device, you’re prompted to enter your password. All well and good, right?

But then, just when you think you’re fully signed in, you’re prompted to perform another action, such as entering a code that Apple or Google sent to your phone number.

The process you just went through is called two-factor authentication (2FA). While it may take you a few more seconds to sign in using this system, the wall of security that 2FA provides against hackers makes up for all the trouble ten times over.

As an added bonus, 2FA also helps qualify small to medium businesses (SMBs) for cyber insurance, which provides business owners with liability protection in case of a breach or a hack in their cyber security system.

Below, we explain how two-factor authentication works, and how important it is for SMB owners to integrate it into their cyber security infrastructures.

How Does Two-Factor Authentication Work?

2FA is a simple, yet effective security system. It works by requiring two forms of identity authentication from an individual trying to sign into an account on the computer. Only once the individual passes the 2FA system can they access the account.

The two required forms of identity authentication may be set up by the administrators of the system or the user themselves when they initially set up their account.

There are multiple ways to authenticate your identity, including

● Entering a password

● Entering a code, either generated via an app, or sent as a text message

● Using a physical security token

● Scanning your fingerprint or using facial recognition

2FA is like an extra wall of protection for the fortress that is your SMB’s computer infrastructure. It’s also more effective at keeping your cyber security systems, well, secure, than just using a password.

The uncomfortable truth is that most passwords are easy to hack, especially if you tend to use the same password for multiple accounts and systems. Even if you have a strong password, a skilled hacker can get past it. Having another step to logging in that is tied to you personally, like typing in a PIN sent to your personal phone number, will help keep your infrastructure safe on all levels of your business.

What Is Cyber Security Liability?

Having two-factor authentication in place for all your SMB’s internal computer systems is important for another reason: it may be required for cyber insurance.

Cyber insurance, like this robust policy offered by LIA, protects your business in the event that, despite all your best efforts, a hacker manages to sneak past your cyber security system.

Breaches happen all the time, even to large corporations. The difference is that those big companies have IT teams on staff that they can dedicate to patching up all the gaps. Small to medium businesses often can’t afford one IT staff member, let alone a whole department. Yet hackers still target them to steal sensitive data, such as your customers’ credit card numbers, and even perform identity theft on you and your employees.

That means for SMB business owners, having a good cyber insurance policy is critical. Liability will handle your claims, provide you with cyber security alerts and quarterly scan reports, as well as offer a whole host of other benefits to help keep protected, digitally as well as financially.

But you may not qualify for a policy unless you already have 2FA in place.


Two-factor authentication (2FA) is not only going to keep your SMB infrastructure more secure. It’s also going to make your business eligible to qualify for cyber insurance with LIA, so your assets are protected even if you are hacked at some point in the future.

To learn more about integrating 2FA in your business and address your other cyber security needs, contact SeraphimGate Systems here for more information on the best way to implement 2FA for your business.

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