• Over a fifth of small businesses (21 per cent) have launched a new online service or product as a direct result of the pandemic, with over a third (34 per cent) having done so during the strictest lockdown months of March-July
• Over one third of small businesses (36 per cent) moved their business operations online from a partial or absent online presence
• Three quarters of small businesses (75 per cent) will sustain their new services over the long-term, but nearly six in ten (57 per cent) do not have cyber insurance in place to protect them

More than one in five small businesses (21 per cent) have launched a new online service or product offering as a direct result of the pandemic, according to new research[1] from Direct Line. They’ve made bold decisions to diversify. Over a third of SMEs (36 per cent) moved their business operations online from a partial or absent online presence.

In order to rapidly adapt to the transformed landscape, a quarter of small businesses spent between £1,000-£5,000 on launching the new digital service or product offering.

SMEs are confident these decisions will pay off. Nearly two thirds (65 per cent) feel optimistic about the success of their small business in the “new normal” – one in ten had not yet formulated an opinion on the matter. Three quarters are also going to sustain the new digital service or product over the long term.

The pandemic has dramatically accelerated the pace of digitisation for small businesses. Over one in five (22 per cent) SME leaders said that in normal circumstances it would have taken them at least 4-6 months to achieve the same level of digital progress.

When asked about ramping up their online presence, small businesses said that they had achieved the following since the beginning of the lockdown in March:

• Increased or started a social media presence (19 per cent)
• Enabled remote working for employees (18 per cent)
• Enabled online ordering systems and deliveries (11 per cent)
• Improved company website (10 per cent)
• Shifted marketing online (9 per cent)

But these rapid transitions were not without difficulty. In launching new digital services and products to adapt to the new landscape, small businesses encountered the following issues:

• Making customers aware of the new offering (21 per cent)
• Lack of time due to pandemic-related upheaval (20 per cent)
• Lack of equipment and software (20 per cent)
• Funding issues (20 per cent)
• Lack of skills (18 per cent)

Worryingly, despite small businesses transitioning towards online services, nearly six in ten (57 per cent) have no plans to invest in cyber insurance to protect their business. Almost one in three (30 per cent) said it isn’t a priority, a quarter (25 per cent) believe that running their operations online doesn’t require insurance, and 24 per cent weren’t even aware that they needed cyber insurance.

With data showing cyber-attacks are on the rise since the pandemic struck, SMEs simply cannot afford to leave their new services exposed.

Karneet Chowdhury, Business Manager at Direct Line – Business, said:

“Small businesses have responded admirably to the challenges of COVID-19 – diversifying services, rapidly shifting online and launching new products to survive and thrive.

“But now they need to take the next step and ensure their new services are fully protected. Cyber-attacks have the potential to devastate a business and completely derail digital progress they have made since the pandemic struck.

“At Direct Line we know how important it is to give small business owners peace of mind, empowering them to focus on growth and prosperity. Our comprehensive cyber insurance covers the cost of fixing a cyber issue and investigating a data breach. It also offers them expert advice and support”.

Direct Line – Business’ cyber insurance covers the cost of fixing the problem and restoring systems and data, including costs to investigate a data breach and notification of affected parties. It gives a business expert advice and support to help minimise damage to the business and prevent future incidents. Additionally, in the event that a business is held responsible for a data breach, it can help with costs of fines and compensation, if insurable under applicable law.

For more information about Direct Line - Business’ cyber insurance, please visit our website:

https://www.directlineforbusiness.co.uk/small-business-insurance/cyber-insurance

For tips on how to protect yourself from cyber crime, please visit our webpage:
https://www.directlineforbusiness.co.uk/small-business-insurance/knowledge-centre/running-your-business/how-to-protect-yourself-cyber-crime

ENDS

Notes to Editors

¹          Opinium survey of 506 small business senior decision-makers, 24^th-30^th July 2020

For further information please contact:

Direct Line Group
Unni Henry
Senior PR Consultant
Tel: 01903 636 149
Email: [email protected]

Eulogy
Michael Hindmarsh
Account Director
Mobile: 07415 396642
Email: [email protected]

 

About Direct Line for Business

Launched in 2007 Direct Line for Business now has over half a million customer policies, proving a flexible range of insurance products for the landlord, van and small business sectors.

Direct Line for Business insurance policies are underwritten by U K Insurance Limited, Registered office: The Wharf, Neville Street, Leeds LS1 4AZ. Registered in England and Wales No 1179980. U K Insurance Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Direct Line for Business and U K Insurance limited are both part of Direct Line Insurance Group plc.

Customers can find out more about Direct Line for Business products or get a quote by calling 0345 301 4827 or visiting https://www.directlineforbusiness.co.uk