Nationwide recently released findings from a survey of small business owners (SBO) regarding cyberattacks. The company found that threats such as ransomware, phishing and malware remain top concerns, but in the past year, nearly a quarter of business owners polled have experienced a scam that used generative AI.

Of those businesses targeted, most described the attacks as attempted fraud using email, voice, or video impersonations of other business owners or senior-level employees they associate with. Over half (52 percent) also say they’ve been personally fooled by a deepfake image or video in the past year. Nine out of 10 business owners say generative AI scams are becoming more sophisticated and that they need help protecting their businesses from these attacks.

Here’s a look at the top reasons why businesses are concerned about cyberattacks, according to the survey’s findings:

"As gen AI continues to transform various industries, its misuse in scams presents a significant challenge for small businesses with less resources for cyber defense than larger corporations, making them easier targets for cybercriminals," said Nathan Lentz, vice president of Small Commercial Sales and Distribution for Nationwide.

Here’s a brief look at training precautions businesses have been taking, according to Nationwide’s findings:

While these stats illustrate a start, they are far from sufficient to keep vulnerable small businesses safe from the more sophisticated types of scams they are seeing.

"When asked about the possible impacts of a cyberattack on their business, SBOs overwhelmingly underestimated the scope of damage a cyberbreach can bring," Nationwide says.

For example, 81 percent of small business owners polled said they believe an attack on their business would cost less than $5K in damages and recovery costs, while another one in five (22 percent) believe they’d be back up and running in a month or less. As Nationwide notes, such events can be far more detrimental to a business in reality. Citing its own claims data, the company says the average cyber claim for a small business will cost $18,000-21,000 while the time for recovery can be as long as 75 days.

The survey found that two-thirds of owners (66 percent) are confident in their business’s ability to recover from an attack, which is a nine-point increase from how they felt in 2022. This is a good thing, in theory, but as Nationwide notes, only 42 percent have purchased cyber coverage, so they may not be as well prepared as they think they are. Two-thirds (66 percent) indicated that they either expect their non-cyber insurance coverages to kick in to cover losses from a cyberattack or that they haven’t even taken the time to think about what they would do after an attack. Seven in 10 (69 percent) say they have an incident response plan in place for a potential cyberattack. Three in 10 (28 percent) admit their plan is outdated, however.

As technologies evolve and scams become more sophisticated and convincing, it is critical that small business owners take proper precautions to protect their businesses.