Nationwide Survey — AI Scams Hitting Small Business

As noted in the previous story, a Travelers survey finds businesses considering cyber-attacks to be the biggest worry of 2024. That is especially true for small businesses that often don’t have the resources to pay the cost of a cyber-attack.

Nationwide did a survey of small businesses and found in the past year that 25% have been hit with scams involving AI. The attacks are spread out between email, voice and video impersonations of supervisors and other colleagues.

Over half admit they’ve been totally fooled by a deepfake image or a video in the past year. Of the small businesses surveyed, 90% believe AI scams are now much more sophisticated and will become even more sophisticated in the future.

Nat Lentz is Nationwide’s vice president of small commercial sales and distribution. He said a lot of the businesses surveyed said they are prepared for an attack but many say the need help.

"While small business owners feel prepared to prevent a cyberattack, they must ensure their preparedness is backed by comprehensive cyber insurance to truly safeguard their operations,” Lentz said. “Without it, they face potentially devastating consequences to their finances, operations, and customer relationships.”

Here’s more from the survey:

• 65% of small business owners say they’re prepared for an attack
• That’s a 17 point improvement of last year’s survey
• 71% are now providing yearly cybersecurity training for their staff
• 36% say they conduct phishing tests on employees every few months to maintain awareness

Even with all that preparation, 25% of small business owners say they’ve fallen victim to a cyber-attack. A high percentage say it had a significant financial impact and also harmed customer trust. Many also admitted not realizing just how expensive a cyber-attack can be to a business.

• 81% think a cyber-attack would cost less than $5,000
• 22% think they’ll be back in business within a month

Nationwide said none of that is true. The company says its claims data shows the average cost of a small business cyber-attack is $18,000 to $21,000 and the recovery can be as much as 75 days.

Sadly, Lentz said a lot of business owners will only purchase — or think about purchasing — cyber insurance after they’ve experienced an attack.

“As cyber threats continue to evolve, agents should encourage business owners to take proactive steps to protect their companies,” he said. “Investing in the right insurance policies can not only mitigate the risks posed by cyberattacks but also ensure that recovery, when necessary, is faster, less costly, and more efficient.”

Source link: Insurance Business America — https://bit.ly/4f6Rwku