Cyberattacks (opens in new tab), ransomware, industrial espionage and similar incidents are burning a hole through the wallets of SMEs all over the UK, a new report is saying. To add insult to injury, these incidents are followed by trading paralysis, which could result in SMEs completely collapsing.
Last year, SMEs paid on average $7,860 to deal with this type of issues, insurance broker Gallagher claims. All SMEs combined, this equals $10.7bn just for last year.
Polling 1,120 SMEs in the country, Gallagher claims a quarter have witnessed such an event last year – five per cent more compared to 2017. One in six had spent upwards of $12,000 and one in ten spent $24,500 and more.
A quarter would have to put lock in key within a month, if a cyberincident (opens in new tab)would render then unable to trade. That means that almost 57,000 SMEs in the country are at serious risk of a full implosion.
“When it comes to crises, cyber and IT security (opens in new tab) clearly represent a “soft underbelly” of businesses that together account for more than 99 per cent of private sector firms,” commented Commenting on the findings, Paul Bassett, Managing Director of Crisis Management at Gallagher. “Given that the UK economy is heavily tilted towards services, cyber-attacks and data breaches evidently present a growing and grave threat to small and medium-sized businesses.”
The report claims that out of all the different types of incidents, cyberattack was the most prevalent one, accounting for roughly 15 per cent of all events. Financial services are the most popular target, with more than a quarter (27 per cent9 being hit in 2018.