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Cyberattacks costing UK SMEs billions every year

(Image credit: Shutterstock.com / Nicescene)

Thousands of UK businesses could be facing extinction due to the threat of cyberattacks, new research has found.

A report from cyber insurance firm Gallagher found that 1.4 million British small businesses (SMEs) were affected by a cyberattack or signficiant security incident last year,

The alerts cost the UK economy £8.8 billion overall, Gallagher says, with the average attack costing nearly £6,500 to deal with.

Crisis

Gallagher's survey of over a thousand UK SMEs found so-called "crisis incidents" such as cyber-attacks, extortion, industrial espionage and terrorism are becoming a growing concern for small businesses everywhere.

Nearly a quarter (24 percent) of those surveyed said they had been affected by a crisis event last year, a five percent increase from 2017. Financial services were hit the most, with more than a quarter (27 percent) saying they had suffered an attack.

One in six (17 percent) SMEs spent £10,000 or more to combat an incident, with nearly one in 10 (9 percent) paying out more than £20,000.

Many businesses said suffering an attack could be terminal for their business, with a quarter (23 percent) admitting they couldn't survive for more than a month if unable to trade following an incident - meaning arund 57,000 UK firms could be at risk of collapse this year.

"When it comes to crises, cyber and IT security clearly represent a “soft underbelly” of businesses that together account for more than 99 percent of private sector firms," noted Paul Bassett, managing director of crisis management at Gallagher.

“Alongside regularly reviewing 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."