Small businesses have high cyber risk awareness but lack preparedness, Coalition study finds

By Navneeta Nandan

July 10 - (The Insurer) - Cyber insurtech Coalition said that while small businesses are aware of cyber threats, most consider themselves too small to be targeted, leading to limited investment in cybersecurity.

In its small business cybersecurity study, Coalition highlighted a disconnect between the perception of cyber threats and their actual level of preparedness.

The insurtech surveyed 1,000 small businesses across the globe to analyze their cybersecurity preparedness. The survey was aimed to study how small businesses perceive cyber threats and how prepared they are.

Coalition provided details of the results both overall and specifically for the UK.

“While the UK participants responded similarly to the global respondents, the study found that UK small businesses invest more time and money in their cybersecurity programs,” said Tom Draper, managing director of Coalition UK. “This reflects the UK approach to risk management, which is to quantify and then mitigate as priorities, with risk transfer a subsequent discussion."

Coalition commented that "awareness isn’t the issue" and small business leaders know cyberattacks are increasing.

Most respondents, 87%, expressed that they are very or somewhat concerned about exposure to cyber threats over the next 12 months, while 86% of UK small businesses said so.

For both overall and the UK, 83% of respondents believe their cyber risk has grown in the past year.

The study revealed that 30% of the global small businesses expect cyberattacks to cost less than $500,000, 39% believe it will cost between $500,000 to $2 million and 31% expect it to cost over $2 million.

Nearly 53% small businesses in UK and 59% globally spend 10 hours or less on cybersecurity every week. As much as 63% of these UK-based small businesses allocate 10% or less of their total budget on preparing themselves to fight against cyber threats. This figure extends up to 74% globally.

Around 77% of UK-based small businesses and 79% globally have encountered at least one cyberattack in the last five years. Despite this, 61% of small businesses in the UK and 64% globally think they are too small to be an attractive target for cyberattacks.

The study also said that ransomware as a service is a growing threat that targets vulnerable, under-protected systems with least resistance, despite a smaller size.

Globally, 59% of these small businesses think they are spending the right amount to fight against cyber threats. Moreover, 14% feel that they are spending too much on preparedness for cybersecurity.

Coalition said that small businesses do not take the total cost of cyberattacks into account, that includes business interruption, forensic investigations, fines and legal fees from customers whose data may have been stolen, apart from the long-term costs of damaged reputation.