A new survey commissioned by the Insurance Bureau of Canada (IBC) suggests that many small and medium-sized enterprises (SMEs) in Canada underestimate their vulnerability to cyber attacks and lack adequate defences and insurance coverage to respond effectively.
According to the findings, fewer than half (48 per cent) of business owners surveyed believe their company is vulnerable to a cyber attack or data breach. Just six per cent of respondents strongly agreed with that assessment, despite other research from the Business Development Bank of Canada showing that 73 per cent of small businesses have experienced a cybersecurity incident.
The survey, conducted by the Angus Reid Forum on behalf of IBC, found that 66 per cent of respondents expressed confidence in their business’s ability to withstand a data breach or website shutdown — results that IBC says suggest a potential gap in awareness of the impact and costs of cyber incidents.
Mahan Azimi
“Cyber threats can lead to serious financial and legal issues for SMEs – issues that regular business insurance often doesn’t protect them from,” said Mahan Azimi, Director, Catastrophic and Emerging Risk Policy at IBC. “Responding to an attack may require hiring experts like forensic investigators, lawyers and public relations professionals, which can be extremely costly for businesses that don’t have dedicated cyber insurance.”
“A stand-alone cyber policy can also help cover costs associated with lost income, recovery efforts and legal liabilities,” Azimi added.
Other findings from the survey include:
Only 47 per cent of respondents said their business is prepared for a cyber attack or data breach.
Sixty-nine per cent said they feel confident in their understanding of emerging cyber risks.
Less than half (48 per cent) have implemented any form of cyber defence.
Twenty-two per cent carry cyber insurance, and just 12 per cent have a dedicated stand-alone cyber policy.
Concerns about artificial intelligence and new technologies appear to be increasing, with 72 per cent of respondents expressing concern that these technologies make it harder to defend against cyber risks, up from 65 per cent last year. However, only 45 per cent of respondents reported having policies and training in place to help employees recognize AI-generated scams.
Legal concerns are also on the rise, with 27 per cent of respondents worried about potential lawsuits resulting from cyber breaches. As reliance on third-party vendors and outsourced IT services grows, IBC noted that small businesses may be left exposed to liability if a partner breach compromises customer data.
“A cyber breach is not just a compromised website or lost data; it’s a business crisis that can impact your reputation and harm anyone whose data you may hold,” said Azimi. “Cyber insurance helps ensure that when the worst happens, you’re not facing it alone.”
To help SMEs better understand and manage cyber risks, IBC has developed a free Cyber Insurance Guide available at www.cybersavvycanada.ca. The guide explains insurance coverage, offers protection and recovery tips, outlines the application process and provides resources to support cyber resilience.
The survey was conducted from Aug. 6 to 15, 2025, among 308 Canadian business owners and decision-makers at companies with up to 500 employees. All respondents were members of the Angus Reid Forum and interviews were conducted in English and French. For comparison purposes only, a sample of this size would yield a margin of error of +/- 5.6 percentage points, 19 times out of 20.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024 and 2025.
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