MANY Yorkshire bosses are ill-prepared to deal with security threats such as terrorism and cyber extortion which could destroy their businesses, according to a new study.
Around 51 per cent of the SME (small-and-medium-sized enterprise) business leaders in Yorkshire who were surveyed by YouGov admitted to having no contingency plans for a crisis, or not knowing what those plans were. This figure was eight per cent higher than the national average.
The study, which was commissioned on behalf of Arthur J Gallagher, found that only 25 per cent of respondents had insurance in place that would respond to a security crisis, such as terrorism, cyber extortion, sabotage, product tampering or emergency repatriation.
A further 42 per cent said they did not know if they had insurance cover or not.
The research also highlighted a gap in perception between the threats Yorkshire SMEs face and their level of preparedness.
A spokesman said: “Two thirds of SMEs questioned believe they are resilient and well-equipped to deal with a security crisis, despite their planning and insurance protection levels showing otherwise.
“There is, however, a widespread understanding that threat levels are growing, with 15 per cent of SMEs in Yorkshire having faced an external security threat in the past two years.
“More than three times that number (48 per cent) believe they could face a threat in the coming 12 to 18 months.
“Almost a third (29 per cent) of those questioned in Yorkshire say they expect to suffer cyber extortion in the near future.”
The study found that many SMEs in Yorkshire feel they are too small to be targeted, with only 14 per cent having tried to assess their exposure to security threats.
The spokesman added: “The nature and effect of today’s low frequency, high impact, security threats — such as terrorism and cyber extortion — is often non-targeted.
“Large security cordons, for example, prevent access to premises, while mass ransomware attacks mean smaller firms are often more vulnerable than large organisations.”
Jon Simpkin, the regional managing director of Arthur J. Gallagher in Yorkshire, said: “It is vital for SMEs to build a culture of crisis resilience.
“Growing awareness of an overall increase in security threats needs to be matched by actions that will help mitigate and manage vulnerability to those risks.
“Our research shows there is clearly a disconnect between the current level of planning by SMEs and how resilient they believe themselves to be, creating a false sense of security.
“Many evidently feel they are too small to be targeted, but today’s fast-evolving security threats are often not targeted at any particular company or industry. It’s impossible to insure against every eventuality, but making sure you have a crisis management plan and robust cover in place for these types of situations, crises or threats are important steps towards safeguarding your business. A £50,000 cyber extortion demand or week of business closure is much more likely to threaten the survival of an SME than a large firm.”
YouGov completed 1,004 online interviews with senior figures at UK SMEs between April 10 and May 10 2017, on the subject of crisis resilience.
The sample covered the public and private sectors. The results are weighted by business size to ensure the final data is representative.
The survey was completed just before the ‘WannaCry’ ransomware incident and the Manchester and London terrorist incidents.
Arthur J. Gallagher offers commercial insurance and risk management services through its 50-strong network of regional branches, which include offices in Sheffield, Leeds and Wakefield.