Millions of SMEs are missing out on cyber insurance

A significant number of the UK’s SME remain dangerously exposed to a cyber-attack, according to new joint research from specialist insurance provider CFC Underwriting and UK finance company Premium Credit.

The study found that a third of businesses that have been offered cyber insurance have decided not to invest in the cover. The biggest objection is the belief that a business is too small to be targeted – 30 percent of firms who don’t have cover say cyber security is not a big enough concern for them.

In addition, nearly a quarter (23 percent) of businesses believe cyber insurance is not fit for purpose and nearly one in five (19 percent) say they do not understand what it covers. Just 10 percent say they cannot afford it. The findings of the study come as government figures show nearly a third (31 percent) of small businesses have suffered cyber-attacks in the past year at an average cost of £3,650.

CFC Underwriting and Premium Credit’s research show many SMEs are taking some action to improve cyber security – just 3 percent of those questioned have done nothing to protect themselves. Some 71 percent say they have installed antivirus software while around two-thirds (66 percent) regularly back up data and 57 percent regularly scan for malware and change passwords.

The research also found that 63 percent of SME owners say their organisation has never been offered the cover.

Pat Brice, distribution director at CFC Underwriting, said: “What this research shows is that we all must do better at articulating the value of this increasingly important cover. It is becoming apparent that businesses are far more likely to fall victim to cybercrime than they are to traditional crime, yet they routinely don’t have the cyber protection they need. Insurance providers and brokers need to work together to make sure they are encouraging businesses in all industries to complement good cybersecurity with cyber insurance in case the worst happens.”