Cyber threats are not just the concern of large corporations or Fortune 500 entities.
Small and Medium Enterprises (SMEs) find themselves equally, if not more, at risk. A concerning 39% of UK SMEs reported a cyberattack in 2022, a figure that's on a concerning upward trend. While many businesses have fortified their defences with security measures, a surprisingly small fraction have fortified their recovery potential with standalone cyber insurance policies.
Why Cyber Insurance?
Cyber insurance is a specialised insurance product tailored to shield businesses from the myriad of cyber risks associated with IT infrastructure and data management. It fills the voids left by standard commercial liability policies, ensuring businesses have a comprehensive safety net in the event of unforeseen cyber incidents.
The Cost Implication
A significant deterrent for SMEs contemplating cyber insurance is the associated cost. Standalone cyber insurance premiums surged by a staggering 130% in Q4 2021, propelled by the escalating frequency and severity of cyberattacks. This has led many SMEs to evaluate the cost-benefit ratio of such insurance.
However, it's pivotal to understand that these premiums are not static. By adhering to cybersecurity best practices and ensuring a robust cybersecurity posture, businesses can position themselves as low-risk entities, potentially leading to more favourable insurance terms.
Cyber Essentials: A Foundation
The nascent nature of the UK cyber insurance market has led to challenges in standardisation and risk assessment. This variability has resulted in diverse qualifying requirements across insurance providers. A common foundational requirement, however, is the Cyber Essentials accreditation, which emphasises:
- Firewalls
- Secure configuration
- User access control
- Malware protection
- Security update management
While bolstering security beyond these foundational requirements might not directly translate to reduced premiums, it ensures a business's defence against advanced threats, ensuring holistic protection.
A Crucial Warning
It's not just about having cyber insurance; it's about understanding and adhering to the insurer's procedures, especially in the event of a breach. In the unfortunate event of a cyber incident, it's imperative to follow the insurer's outlined procedures meticulously. Familiarise yourself with these procedures, and more importantly, share them with your IT support provider. Failing to adhere to these can jeopardise your claim, leaving you exposed to the full brunt of the breach's implications.
In the face of increasingly sophisticated cyber threats, prevention, while essential, is only half the battle. The other half is preparation for the aftermath. Cyber insurance might not prevent an inadvertent click on a malicious link, but it can significantly mitigate the repercussions of such lapses.
Total Group, as a leading IT solutions provider, underscores the dual importance of robust cybersecurity measures and comprehensive cyber insurance. It's about safeguarding not just data but the very essence and reputation of your business.
Source: Data extracted from a document on cybersmart.co.uk