Cyber insurance basics for SMEs

Learn about the importance of Cyber insurance as part of your overall cyber security strategy!

Jon Layton

3/22/20254 min read

Cyber insurance basics for SMEs – Act NOW!

‘It is crucial for UK businesses of all sizes to consider cyber insurance, there is now more chance of a cyber claim than traditional business claim types! The majority of cyber attacks occur as a result of human error, just one reason why cyber insurance should form an integral and vital part of your business’s cyber security strategy!’

Why cyber risk is no longer just for big business

Cyber attacks seen in the media are usually relating to large businesses such as the Royal Mail or the NHS, and so many business owners mistakenly assume that smaller businesses aren’t targets for cybercrime. However, SMEs are seen as easy targets by cyber criminals as they often have weaker security measures and cyber controls in place, as well as lower general levels of employee training.

What can insurance help with that cybersecurity can’t?

Cybersecurity is vitally important for every organisation, even the smallest business, charity or school. Having security controls in place to protect email, on-premises technology and cloud software and technologies is critical and many insurance providers want to see that a client has those measures in place. In addition, you should consider Cyber Essentials accreditation as this will demonstrate a basic level of cyber security and awareness and may give you a commercial advantage against your competitors who have not achieved this!

Insurance covers a different element of cyber risk. No cybersecurity protection is foolproof and cyber criminals are continually coming up with new ways to exploit vulnerabilities in software and other technologies. Additionally, many incidents happen because of a mistake made by a person, not a computer.

So, when a cyber criminal is able to get through your defences, is your organisation in a position to handle it? Financially, a cyber attack has the potential to cripple any business and particularly an SME - whether it’s lost funds from a fraudulent financial transaction, payment of a ransom, or just the cost of hiring specialist firms to investigate and get your systems back up and running.

There are other considerations of course, such as systems downtime that prevents you from running your business; reputational issues that impact your future success; the potential impact on third parties that you are responsible, for among others.

In addition, you could risk significant fines if you suffer a data breach!

Could your business survive a cyber-attack?

Traditional business insurance just wasn’t designed for the fast-moving nature of digital risk. Threats from cyber criminals are constantly evolving, and so a specialist cyber insurance product from an insurance provider with expertise in this area will help make sure your organisation is covered for the right risks should an incident happen. Having the right insurance cover could mean the difference between surviving a cyber-attack and potentially losing your business!

What does/should cyber insurance cover?

Cyber insurance should provide both First and Third-party covers for your full business protection. First-Party protections are all about meeting your own expenses and getting your systems back up and running following a cyber incident or data breach. This should include access to a 24/7/365 response team of experts who will fully handle the incident in co-ordination with your internal staff, including any ransomware negotiations!

Third-party sections cover your liability to others following a cyber event that has resulted in your systems and data being compromised.

Examples of additional covers include crime, invoice manipulation, extortion, ransomware, social engineering, regulatory fines, crisis management and PR costs, computer replacement, media liability and more!

What to consider when buying cyber insurance

- Will the insurer pay costs upfront or only at the end of the claim process?

Is there an effective incident response service to prevent smaller incidents from escalating and to handle your claim?

- Is the response service 24/7/365?

- What cyber expertise can the insurance provider offer?

- Does the insurance provider have a considerable positive track record in mitigating ransom demands?

- How is the cost of the insurance determined?

- Are there any added-value aspects to the cover?

- Is Crime cover available, as many policies exclude this?

- Is your broker an expert in this rapidly-evolving class of insurance?

Contact A-Pro Associates NOW to discuss this vital and modern layer of protection. We are able to provide you with a totally non-intrusive FREE RISK ASSESSMENT of your domain and network that will highlight any current security vulnerabilities and existing data leaks plus provide you with a no-obligation quotation to add this essential cover! Additionally, you will benefit from ACTIVE INSURANCE that continually monitors your systems and alerts you to any new discovered weaknesses and vulnerabilities or potential threats! Why not get in touch and ask us to contact you to discuss!