58,000 Small & Medium Businesses in the UK To Collapse After a Cyber Breach
Research has emerged purporting that as many as 50,000 small and medium-sized organisation in the UK alone are at risk of closing their doors in the wake of a cyber attack.
The numbers come from Gallagher who says that there’s a huge unseen danger on the part of smaller organisations that believe that they’re too small to be a target. Their study took responses from 1,120 UK firms with up to 250 employees, with results showing that tens of thousands of organisations are at risk of a serious cyber incident that could prove fatal for the business.
The average cost of these cyber breaches is a reported $12,000, however, 17% of organisations that took part in the poll reported that they were forced to pay $20,000, while a further 9% paid in more than $38,000 in the aftermath of a cyber incident.
What’s more, just under a quarter of the respondents said that they’d fail to last more than a month if a cyber attack crippled their networks. Gallagher used this number for the basis of their claim that as it stands, there’s more than 58,000 organisations operating in the UK alone that are at risk of closing their doors after a cyberattack.
Gallagher says that 1.4 million businesses were hit with cyberattacks last year, with damage totaling $17 billion to the world economy. Just under a quarter of the organisations interviewed by the company said they were impacted which represented a 5% increase year-on-year. Data sourced from Hiscox shows that there was a “sharp increase” in the number of reported cyberattacks on small firms, rising from 33% to 47% as well as medium-sized organisations which were up 63% from 36%.
According to the report, the most common form of cyber incident or crisis that was reported by organisations was a data breach and subsequent cyber-extortion attempt from the hackers, often referred to as a ransomware attack, which accounted for around 15% of all reported cyber events.
Paul Bassett, manager director of crisis management at Gallagher said that the UK’s service-oriented economy was particularly at risk, considering the vast number of small and medium-sized organisations operating without adequate security protocols in place.
“Alongside regularly interviewing their crisis preparedness, response plans and forms of protection, such as insurance, it is critical UK SMEs also assess their ability to survive in the event of a major crisis incident when the risk of serious disruption and protracted recovery process is very real.”
“The cost of a crisis is by no means the only consideration,” he added. “Duration is key- especially with a quarter of UK SMEs admitting they could survive for less than a month if unable to trade following an incident. 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,” Basset said.