Small businesses in the U.K. lost an estimated $10.74 billion due to cyberattacks, fraud, terrorism and other risk factors, according to new research by insurance broker Gallagher.
Reports in SmallBusiness.co.uk on Wednesday (Aug. 28) said Gallagher researchers are urging small and medium-sized businesses to develop incidence response plans amid revelations that such crises result in major financial losses.
Nearly one-quarter of SMBs surveyed said they were affected by some kind of crisis event in 2018, a 5 percent increase from the prior year. Seventeen percent also said they spent more than $12,000 to address the issue, while 9 percent said the price tag exceeded $24,400.
Further, 23 percent said they do not believe their small business would be able to survive a month following such a crisis.
“Our research illustrates the scale of the challenge facing U.K. SMEs,” said Gallagher’s Crisis Management Managing Director Paul Bassett in a statement. “When it comes to crises, cyber and IT security clearly represent a ‘soft underbelly’ of businesses that together account for more than 99 percent of private firms. Given that the U.K. economy is heavily tilted toward services, cyberattacks and data breaches evidently present a growing and grave threat to small and medium-sized businesses.”
He added that small businesses must regularly review their incidence response plans and forms of protection, while also ensuring they are able to endure a crisis should it emerge.
According to Bassett, small business owners must be diligent about more than just the financial cost of a crisis. “Duration is key,” he said. “For companies with tight margins and limited working capital, even a relatively short-term denial of access to premises or systems paralysis could be a crippling, possibly fatal, blow.”
Small businesses, he continued, must be able to “anticipate, prevent, respond [to] and recover from a major security incident” while having access to emergency funds.