14 May 2014 Insurance

UK insurers not trusted with cyber claims

The UK is facing a crisis of confidence in its insurance sector with insurers not being trusted to honour cyber security claims by a shocking 63 percent of organisations.

The study, sponsored by AppRiver, the cloud-based email and web security specialist, spoke to 250 security professionals at this year’s Infosecurity Europe exhibition.

Trust is so low that 32 percent of UK businesses don’t even bother seeking this increasingly vital cover.

Amongst those 18 percent who were covered by cyber liability insurance, special measures had been introduced as part of the policy requirements in 38 percent of cases. Just under a third (32 percent) said that this had not been necessary, with 39 percent unsure.

With the costs of data breaches on the increase, costing an average $145 per record breached (according to recent figures from Ponemon Research), organisations could find themselves not only out of pocket, but out of business if the worst should happen.

Jim Tyer, EMEA channel director for AppRiver, said: “It’s alarming the high percentage of people who have little to no faith in the insurance industry. That said, and playing devil’s advocate a little, with as many as 91 percent of organisations claiming to have suffered a cyber attack (according to another report), perhaps the insurance sector should issue a collective sigh of relief that nearly a third of organisations aren’t seeking cover!

“An interesting calculation is that the probability of special measures being a requirement is at least one in every four policies. What this means for those respondents we spoke with during the show who were either unsure if their organisation had cover, and even those that did have cover but were unsure if they’d had to do anything different, 28 percent would find their policies (if they have one) invalid due to this mandate. That’s worryingly high.”

None of the respondents spoken with, who had cyber liability insurance, had had to make a claim on their policy. Tyler explains that the likelihood that no-one suffered a breach is unlikely meaning that either a percentage of people lied, hadn’t made a claim even though they’d suffered a breach or are unaware of their current security.

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