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March 06, 2015

UK firms not taking advantage of cyber insurance

UK firms not taking advantage of cyber insuranceUNA, an organisation representing independent insurance brokers, is calling on UK SMEs to ensure they are aware of the options to protect themselves against the potential cost of cyber crime.

Research shows that only 13% of UK firms currently have cyber insurance compared to 40% of US firms.

Tim Ryan, executive chairman at UNA, says UK businesses need to assess their vulnerability to cyber attacks and take advantage of risk management solutions.

"This is a pitfall for so many businesses, particularly the smaller ones," said Ryan. "A separate cyber policy will ensure that your cyber risks are fully catered for and, most importantly, will ensure less of an impact on the bottom line of a business."

According to the PWC 2014 breaches survey, 60% of UK businesses had a cyber-security breach and 45% suffered infection from viruses or malicious software in the past year (up 4% from 2013). In addition, 59% of respondents expect more security incidents in 2015.

Some insurance policies may provide elements of cyber cover, says Ryan, but most will exclude losses caused by a cyber attack. He added: "Industry is by far the biggest victim of cyber crime. We have already seen a commitment from the government to work closer with insurers to help develop the UK’s cyber insurance market. The key for businesses is to recognise the role insurers can play in driving improvements in cyber security risk management."

Cyber liability is the new "hot topic", says Peter Castle, executive director at Bluefin. The rise in digital and online trading is creating new risks, he says, including viruses, hacking, e-business interruption and privacy liability.

"These risks are not adequately covered by traditional standard policy forms," he warned. "Bad news stories help promote the need for cover, but buyers, as always, need to beware. Many policies that are emerging are very specific in what they cover and what they don’t cover. It is imperative that those buying this insurance think long and hard about the risks they run, and ensure that any policies bought reflect the cover required."

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