Cyber Insurance is becoming an essential for businesses.

According to a recent UK government report 81% of large UK businesses and 60% of small companies were victim of a cyber security breach.

It also states roughly 98% of large UK firms lack insurance they would need to help them recover from a serious cyber-attack.

The report published on 23 March by HM Government and Marsh, (a leading insurance broker and risk advisor), announces new joint initiatives between government insurance companies to help business get to grips with cyber security. The government also has plans to establish London as the global centre for cyber risk management.

The report revealed that only a small fraction of large UK firms have taken out cyber insurance whilst barely any smaller businesses have any cyber insurance.

A previous report in 2014 outlined that the average cost of the most serious security breach companies can face costs between £600,000 and £1.15 to put right making insurance a necessity.

“Cyber attacks can be rapid, highly damaging, and public, potentially leading to a vicious cycle of declining investor and customer confidence and therefore cash availability.”

With recent breaches of banks around the world you can see that this is a real world example of how customers can lose confidence and a cyber breach can ruin businesses.

Nearly half of the chief executives interviewed for the report did not even know it was possible to have cyber-insurance. Out of those believing that insurance was in place only 10% found they were actually insured under cyber threats.

The report stated: “Consequences that cause the greatest concern include data loss, business interruption, and theft of intellectual property, with the impact being dependent upon the industry, risk profile, and size of a particular firm.”

Typically 60% of incidents that are reported to insurers are the result of an accident such as hardware damage although the majority of the high-severity losses stem from malicious attacks.

Cyber threats were outlined as coming from a range of sources such as private companies for example competitors, lone hackers trying to steal information, governments and ex employees.

Cyber security training is also an area for focus which can deter security breaches and Marsh believes that insurance companies can help by sharing information which will reduce weaknesses in systems across businesses.

The U.K. government has now launched the Cyber Essentials scheme to guide businesses in protecting themselves against cyber threats in a bid to reduce potential losses and place a focus on safe computing.

Source: Uk Cyber Security Report