Small Businesses Underestimate Recovery Time, Cost of Cyberattack
Nationwide Agency Forward survey showed 40% of small business owners surveyed expect a cyberattack to cost less than $1,000 and another 60% think it would take less than three months to fully recover.
However, Nationwide claims data shows cyber claims range between $15,000 to $25,000 in recovery costs, plus costs associated with the restoration process, reputational damage, and a potential legal fallout. The average recovery time for a business after an attack is 279 days.
“Small business owner concern around cyberattacks has risen 15% since the beginning of the pandemic, but most owners still don’t realize the extent of damage a cyberattack could have on their company and livelihood,” said Peter McMurtrie, president of Commercial Lines at Nationwide.
“Agents have strong opportunities to bust some of these common misconceptions around effects post-cyberattack and emphasize that there is greater risk than just loss of funds — business reputation is at stake.”
According to survey results, 48% of small business owners feel ready to prevent a cyberattack on their business. Just 56% of small business owners report offering cybersecurity training at least once a year, and less than 25% of small business owners send regular phishing test emails to employees.
The survey from Nationwide found 70% of commercial lines agents said clients are concerned about a cyberattack but less than half regularly discuss cybersecurity with their customers – a concerning statistic especially for small business owners since many of them greatly underestimate the costs and recovery time associated with a cyberattack.
Lack of knowledge related to the availability of cyber insurance could be behind the survey’s finding that only 28% of small business owners report having cyber insurance compared to 71% of middle market business owners.
Although small businesses were found less likely to have cyber coverage, Nationwide said the survey found that they overwhelmingly responded that they’re interested in learning more about what a cyber insurance policy has to offer.
When made aware of cyber protection resources and products, about 75% of small business owners say they were interested in purchasing common coverages.