Written By Leah Tolton KC, FEA

In an era where digital threats are more sophisticated than ever, cybersecurity has become a pressing concern for family enterprises. These businesses are attractive targets for cyberattacks and need to balance the critical goals of protecting themselves while maintaining operational efficiency.

My Bennett Jones colleague, Suzie Suliman, recently joined me as a guest on the Beyond Succession podcast. Suzie is a corporate and intellectual property lawyer and helps the firm’s clients protect their technology assets. She regularly drafts and negotiates commercial agreements relating to cybersecurity. These are some of the highlights of our discussion.

There are a lot of moving parts and pieces in a family enterprise. What is the state of the cybersecurity landscape, and what are the main threats businesses should be aware of?

Cyber threats are increasing, especially in cloud environments where critical data resides. Ransomware is the most common, often paired with data theft for dual extortion. Social engineering and phishing are also escalating, aided by artificial intelligence (AI). Access brokers now sell system vulnerabilities on the black market, making attacks more targeted and sophisticated.

Why are family enterprises and family offices particularly attractive targets for cyberattacks?

Family enterprises are interconnected networks of businesses and individuals, offering multiple points of entry for threat actors. Publicly available personal data facilitates realistic social engineering. Historically, these organizations prioritize efficiency over cybersecurity, making them attractive to attackers seeking valuable yet relatively unprotected targets.

Is prioritizing efficiency over cybersecurity one of the most common gaps that you see in cybersecurity practices, or are there other gaps that you see?

Yes, many organizations prioritize efficiency over security, often viewing cybersecurity as a burden. Other gaps include lack of ongoing user training and poor awareness of emerging threats. Third-party risks are growing too—vendors can introduce vulnerabilities, so contracts and onboarding processes must include cybersecurity safeguards and due diligence.

Are there other things that businesses can do to mitigate the human factors and vulnerabilities?

Training is key. Family enterprises should reinforce cybersecurity awareness through regular role-specific training and phishing simulations. They can also link cyber hygiene to performance reviews and compensation, while enforcing strong password policies, device-use guidelines and limited data access. These measures help reduce the likelihood of human error leading to breaches.

Moving on to the legal consequences of this, what are the key liabilities that family enterprises face if they experience a cyberattack?

Family enterprises face financial losses from ransom payments, fraud, recovery costs and business disruption. Breaches involving sensitive business or personal data can lead to reputational damage, regulatory investigations, mandatory breach notifications and even class action lawsuits. Intellectual property loss also threatens the long-term competitive advantage of a business.

You mentioned earlier in our conversation the importance of ensuring that contracts with subcontractors include cyber protection. How do you negotiate that? Is that an industry standard now?

While not universally mandated in Canada, especially outside Quebec, strong data protection clauses are a best practice. Contracts should require compliance with privacy laws, incident reporting and security measures. Include indemnities, insurance and limitations of liability. Businesses should review existing agreements too, ensuring vendors meet your standards and share responsibility if breaches occur.

Are there any other examples of strategies that a family enterprise could take to enhance their cybersecurity?

Focus on identifying and protecting your “crown jewels”—the most sensitive data. Tailor security based on data sensitivity. Establish robust policies for passwords, backups and incident response. Address remote work, device use and AI with clear guidelines. Strong policies aligned with risk levels are key to resilience.

Let’s assume the worst happens and a business has an incident. Describe for me what an incident response plan is and how it could respond to that kind of scenario.

An incident response plan outlines how to handle different types of cyber incidents. It defines escalation levels, roles and communication protocols. It includes contacts like insurers and forensic experts. The goal is to respond quickly, minimize damage and meet legal obligations. Always keep a physical copy of the plan at the ready in case systems are compromised.

What are the first questions a family enterprise should ask when deciding to upgrade their cybersecurity? Where should they start?

Start with a risk assessment. They should ask themselves: What are our most critical data assets? What are our biggest threats? Do we comply with privacy laws? Are we monitoring threats? What mitigation tools—like insurance or vendor safeguards—do we have? Review past incidents to learn and improve your approach going forward.

How can the next generation play a role in advancing cybersecurity within their family enterprises?

The next generation can champion cybersecurity by leveraging their deep knowledge of the business and comfort with technology. They can drive investment in cyber budgets, promote strong policies and foster a culture of security. Their leadership helps ensure cybersecurity becomes a strategic, not just technical, priority.

What other emerging challenges should family enterprises start preparing for now?

AI is accelerating threat sophistication and enabling faster, more convincing attacks. Access brokers are growing more active, selling vulnerabilities to malicious actors. Meanwhile, reputational risks are amplified by instant online exposure. Family enterprises must manage their digital presence carefully and stay ahead by integrating cybersecurity into all aspects of business strategy.

The full Beyond Succession podcast episode on cybersecurity and family enterprises is available here. If you would like to discuss how family enterprises can protect themselves from cyberattacks while maintaining operational efficiency, please contact Leah Tolton.