One of the biggest problems with shared hosting is if one website on the server gets hacked then it’s likely that other sites on the same server will get hacked as well. Of course, this depends on several factors, including the severity of the attack. But let’s assume that Site #1 was hacked and the hacker managed to install a vicious script in the files on that site causing it to get flagged by the search engines as a distributor of malware. That’s pretty serious.
Let’s also assume that the website owner is savvy and works quickly. He gets the malware off his site and requests a review from the search engines. They give him a thumbs up and his site is up and running within 24 hours. Do you know where else on that server the hacker managed to go?
It’s a problem with CMSs. If there is a weakness in your armor and a hacker gets through, all it takes is one site and he’s in the door of the server. He can now move around freely wherever he wants. A second site with a weak password can fall subject to the same hacker. And any others on that server as well.
If your website is on a dedicated server then you have the added security of being alone. Hackers may attempt your site, but they’ll have to get to it from the outside, not from the inside of your server. A dedicated server offers increased security from hackers.