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Many businesses are failing to take out cyber insurance

According to a new poll, more than a fifth of UK businesses ranging from sole traders to major corporations have been financially impacted by cybercrime. Despite this, the YouGov poll, commissioned by SJL Insurance, found that more than three-quarters of the businesses surveyed might not have ever taken out cyber insurance.

More than half of the organisations hit had been struck more than once and 3% had been victim to cybercrime more than ten times. The majority (87%) of those hit suffered damage worth less than £100,000, but 9% had experienced losses between £100,000 and £499,999. At the upper end, 2% of businesses suffered losses costing between £500,000 and right up to £250m.

Only 39% of businesses that were affected by cybercrime were insured at the time, whereas 53% of respondents said that they weren’t, and 8% of decision-makers within the organisations said that they weren’t even aware whether they had cover in place or not.

Of all the respondents, 46% of senior decision-makers said that they had never had cyber insurance at their business, while 31% didn’t know.

Tailored cyber insurance can cover a number of different incident types

SJL Insurance’s CEO Simon Lancaster said: ‘We are keen to educate companies about how they can protect themselves against this emerging threat, in the same way as they do against traditional losses such as fire and theft.

‘We have discovered that many companies take out cyber insurance as an add-on policy on the back of their professional indemnity insurance, but these usually do not cover the company robustly.’

He added that tailored cyber insurance could include a number of different elements, including business interruption cover, cover for cyber incidents experienced by suppliers, and accidental cover for accidents caused by staff members.

A recent report by the Council of Insurance Agents & Brokers (CIAB) found that the situation was similar in the US. CIAB reported that only a third (33%) of clients had purchased some form of cyber insurance in the past year. Of these organisations, only 34% of clients had increased their levels of coverage over the past six months.

CIAB’s CEO Ken A. Crerar said: ‘While respondents agreed that clients view cyber insurance as important to have, this did not necessarily translate to clients increasing their budgets for higher limits or increased coverage.’

Original article by Tech Data Newsflash, edited by TDConnect editors

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