Cyber attacks affecting businesses are on the rise. As technology advances and UK firms become more reliant on computers, servers and networks, so do the risks become greater.
In fact, the Insurance Times recently reported that 60 per cent of small and medium-sized businesses in the UK have experienced some kind of cyber breach in the last year, with the average costing around £75,000. So it begs the question, should cyber insurance, along with employers liability, become an insurance that is compulsory for UK firms?
The scale of cyber attacks
The report by the Insurance Times continued to say that the cost of cyber attacks to businesses globally sits at around £200 billion each year.
Whether it is a hacking into your company’s server, obtaining sensitive information or a virus taking over your network, the potential costs to a business are huge including:
- Law suits
- Business interruption
- Loss of profit
- Hiring specialists to fix the cyber issues
- PR to rescue your brand image
With 98 per cent of UK businesses without any cover in place, a strong case for compulsory cyber insurance emerges to protect UK businesses and above all, employment.
The plans to make cyber security compulsory
Computer Weekly explains that 46 out of 50 US states have made cyber security an obligatory requirement. The EU has drafted a reform to follow suit but with the UK’s future involvement with the EU currently uncertain, ‘the scale and timing of this regulation has been put on hold’.
What cover is available?
The cover available includes legal fees, loss of income, hacker damage, extortion costs, loss of third party data, PR and business interruption compensation.
Whilst some business owners might be fretting at the idea of paying for more insurance, cyber cover can be purchased for as little as £15 per month for small companies and receive cover for up to £5 million per year. (Source: bewiserbusinessinsurance.co.uk)
Insurers have to get an idea of the potential risk and how much value the company places on their IT infrastructure. Whether they have a lot of employees, sensitive information and the amount of security they have in place will affect the cost of their policies.
But as businesses becomes more reliant on the web and the need for cyber insurance increases, it is not simply a matter of if, but when.