Small Businesses and Consumers Grossly Underestimate Danger of Cyberattacks

• Business owners don’t believe they are a likely victim in cyberattacks
• Many businesses still don’t have cyber insurance
• 40 % of regular consumers think they criminals never targeted them

Consumers and businesses alike are underprepared to deal with existing or upcoming cyber threats. Surprisingly, according to a Nationwide Agent Authority survey, the main reason is not the lack of funds, but misplaced confidence and poor risk management.

People’s focus switched from keeping their families and businesses safe from cyber threats to the more tangible goal of staying afloat in these uncertain economic times. That’s not necessarily happening all across the board, with some middle-market business owners being more proactive in their cyber defense.

The most significant issue small business owners face is their inability to recognize their cyber vulnerabilities, which leaves them open to attacks. This type of business is more likely to suffer cyberattacks, and it’s the part of the economy that protects itself the least.

“Though nearly half of cyberattacks are aimed at small businesses, only 37% of small business owners reported believing they are at risk to fall victim to a cyberattack,” states the survey. “Alarmingly, about one-third also said they are not confident they could recover if their business was attacked.”

Almost half of small business owners believe they are prepared to handle a cyberattack, but only 39 percent of independent agents say their customers prepare to prevent one. Overconfidence is also evident in the fact that only 17% of small businesses have cyber liability insurance. Moreover, 53 percent of business owners give employees no specific training.

In contrast, middle-market businesses are more aware of potential cyberattacks, especially since they are also the target of much more sophisticated operations.

“Seven in 10 (70%) middle market business owners are concerned about a cyberattack, and 79% feel they are well prepared to address an attack,” according to the survey. “They are also confident in their ability to recover from an attack (80%). This confidence is warranted as they are more likely than small business owners to have taken key security precautions, including purchasing cybersecurity insurance (71%).”

Consumers fall on the other side of the spectrum and are generally more oblivious to the dangers they face online. Forty percent of consumers said that they were never affected by an attack, including phishing.

“This lack of knowledge lends to poor preparation for potential cyberattacks. Only 1 in 3 (32%) said they feel prepared to fend them off and an alarming 8% reported taking zero cybersecurity precautions. Only 13% of consumers indicate that they have some type of cyber insurance,” the survey also states.

The Nationwide Agent Authority performed a 20-minute quantitative online survey of 2,600 U.S. independent insurance agents, small business owners, mid-market business owners, mid-market business owners with fleet vehicles, African American business owners, Hispanic business owners and general consumers between June 9 and June 25.