Silent cyber risk leaving millions of UK businesses underinsured
Almost two-fifths (39 percent) of senior decision makers in UK companies say cyber-attacks are one of their biggest concerns, yet the vast majority of businesses (82 percent) do not have specialist insurance in place to cover them against the cost and impact of a cyber-attack, according to research by global insurance broker Gallagher.
The issue of “silent” cyber exposure is being caused by UK business leaders thinking traditional insurance covers them, when in reality a standard policy is unlikely to offer cyber cover. Under a fifth (18 percent) of businesses have a standalone cyber insurance policy, with many business owners buying a policy direct from an insurer (43 percent) without the advice of a broker, leaving them potentially unaware of the risks their business may be exposed to.
Business leaders may also feel their business is protected against cyber risk as they have invested in technology. Some 42 percent of bosses have invested in out of the box technology; however, only a minority (39 percent) have taken specialist external advice, leaving many making business critical decisions, potentially without the knowledge required.
Of the businesses surveyed, the majority of leaders in larger organisations cite cyber-attacks and data breaches as a big issue (59 percent), compared to a minority of bosses running firms employing 50 people or less (19 percent). However, last year, a third of all businesses (32 percent) admitted they had been subject to a cyber-security breach or attack, showing that the risk is considerable to businesses of all sizes.
The most common type of cyber issue to impact UK businesses is phishing attacks (identified by 80 percent of business that experienced a problem), followed by impersonation in emails or online (28 percent of businesses) and viruses, spyware or malware including ransomware attacks (27 percent of businesses).
Tom Draper, head of cyber at Gallagher, said: "The issue of cyber-crime is one of the biggest risks facing businesses today. Clearly there are practical steps businesses can take to help protect against cyber-attacks, but unfortunately the risk remains significant and many businesses are leaving themselves exposed to financial and reputational damage if they do not consider having specialist insurance in place.
“While there is evidence to suggest larger businesses are more commonly targeted, small and mid-size businesses are still very much exposed to cyber security breaches or attacks and may not have sophisticated protection in place like large businesses, and cyber criminals will be aware of this vulnerability. They are also liable to be caught up in cyber-attacks aimed at third party suppliers or those targeted at common systems and software, such as the cloud, on which their business may rely."
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