The Increasing Need For Cyberinsurance
18 April 2017
The British Chambers of Commerce have unveiled new figures that suggest that one in five British businesses were hit by a cyberattack last year.
Larger firms – defined as those with 100 staff or more – were more likely fall victim to a cyberattack than their smaller counterparts.
The research surveyed 1,200 UK companies and found that 42% of larger firms had been subject to a cyberattack, compared to 18% of smaller firms.
The BCC has urged companies to do more to protect themselves – meaning there will be an increase in companies purchasing cyberinsurance. Just a quarter of the firms surveyed had already invested in insurance against a cyberattack.
Already, large international corporations such as Yahoo, eBay and Talk Talk have suffered the fall out of major cyberattacks – leading to a reduced customer base and loss of trust. In 2016, Tesco bank reported that it had lost in the region of £2.5 million, owing to an extraordinary security breach at a British bank.
In February of this year, Ciaran Martin, chief executive of the National Cyber Security Centre (NCSC), warned that businesses in Britain were already subject to dozens of cyberattacks – at a rate of approximately 200 per day.
Data protection laws already require companies to take adequate measures to keep customer information secure. From next year, protection regulation will be furthered as businesses will have an extended responsibility to protect personal data from cyberattacks.
The need for sufficient cyberinsurance is growing. Smartphones, emails, apps and smartwatches all possess sensitive data that could potentially be hacked and leaked.
Cybersecurity experts have even warned that hackers could hold businesses to ransom once they have obtained personal information. Traditional anti-virus software simply cannot counter these attacks. Everything from your date of birth to emails; from car alarms to your sort code is up for grabs.
Firms that don’t protect themselves with the proper anti-malware software and adequate cyberinsurance leave themselves open to acquiring hefty penalties.
Cyberinsurance is set to become a booming industry, with plenty of firms looking to add this type of coverage to their portfolio. It will certainly be an interesting time in the insurance market as more cyber-related roles become available.
Whilst the rise of cyber attacks and hacks can seem frightening for companies, it’s reassuring to know that insurance firms are already on the ball in terms of offering coverage.
The risk to businesses is currently marked as “significant and growing” by the National Crime and Security Centre – so the time to move in to such a field is very much now. This looks to be a really exciting time in the insurance market in terms of these new opportunities to provide cyberinsurance.
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Written By Stuart McKenna