It’s all too common for small and medium-sized businesses to wrongly assume that they don’t need cyber insurance.
Often, this is because business owners mistakenly think that cyber criminals tend to target big businesses. However, SMEs are actually the most targeted size of business, as they are often more susceptible to a data breach. This is why it’s so important that smaller businesses ensure that they have the right cyber insurance in place.
What is cyber insurance?
Cyber insurance is a specialist type of insurance that is designed to cover aspects of business liability in the event of a data breach which occurs due to various types of cyber crime (malware, ransomware, distributed denial-of-service (DDoS) attacks and internal data breaches).
The important thing to remember is that cyber threats are evolving all the time. Because of this, it’s important to ensure that not only do you have the right cover, but also that you renew and update your policy annually to be certain that you are covered against any new threats.
Before seeking out cyber insurance, it’s important to understand what exactly cyber insurance is and the different levels of cover you may need both now and in the future. Of course, a good cyber insurance broker will help you understand exactly which policy is right for your business, but there’s no harm in doing your own research beforehand.
What does cyber insurance cover?
What exactly your cyber insurance covers will depend on the policy and options you select. Most cyber insurance plans will cover a range of potential losses and expenses that may be incurred due to a cyber attack. Items covered could include:
- Legal fees and expenses
- Repairing or replacing infected / damaged hardware
- Recovering data
- Restoring lost data
- Notifying customers and other stakeholders of the breach
- Legal costs and compensation to impacted 3rd parties
- Expert advice – both technical and in terms of communications, which can allow you to quickly limit the impact of an attack and manage the potential resulting in reputational damage.
Before policies are recommended to you, insurers will analyse the strength of your company’s cyber security, and may even make a series of recommendations in terms of how to strengthen your current security levels.
Having strong cybersecurity solutions in place before taking out your policy may open up more coverage options.
Why is it so important for smaller businesses to ensure that they are covered?
42% of small and micro-sized UK businesses identified at least one data breach or cyber attack in the last 12 months (Gov.uk).
Smaller businesses are often seen to be easier targets than large businesses, as they tend not to make the same investment in cybersecurity systems. In fact, the same Gov.uk report also shows that small and micro-sized businesses are less likely than medium and large businesses to:
- Have sought information, advice or guidance about cyber security (58% vs 79%)
- Have formal cyber security policies in place (26% vs 62%)
- Have undertaken any cyber security training (19% vs 47%).
This all leaves most small businesses very vulnerable and makes having the right insurance cover in place even more important.
How can I find out more information about cyber insurance for small businesses?
Ashley Page is an award-winning international insurance broker with more than 40 years’ experience in providing innovative insurance solutions and risk management advice to our valued clients. We’re also cyber insurance specialists – so the best way to find out more about cyber insurance for your business, is to get in touch with our team of experts by calling 020 8349 5100.