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Cyber Insurance Pay Out Rate at 99%

Cyber Insurance Pay Out Rate at 99%

The Association of British Insurers has recently reported that 99% of claims against Cyber Insurance in 2018 were successful and resulted in a pay-out. This represents one of the best claims acceptance rates across all insurance products.

High payout - Low uptake

However, the rate of uptake for cyber insurance remains pretty low with just 11% of businesses thought to have a specific cyber insurance policy (meaning a whopping 89% are potentially not covered by this valuable insurance).

Information available from the UK Government shows that 32% of UK business and 22% of UK charities identified cyber security breaches or cyber attacks in the 12 months prior to the report. Medium sized and larger businesses are at a greater risk than smaller businesses.

The most common attacks are:

  • Phishing emails (80% of businesses and 81% of charities experiencing breaches or attacks)
  • Others impersonating their organisation online (28% and 20%)
  • Viruses or other malware, including ransomware (27% and 18%)

See our previous blog which shows a video of how a cyber-attack would look in a real-world scenario

Cyber crime has far reaching impacts

The impact of a cyber breach on businesses can extend far beyond the actual cost of correcting the breach. Of those who identified breaches, 32% of charities and 29% of businesses needed to put new measures in place to prevent future attacks, 27% of charities and 32% of businesses reported that the attacks took up staff time and 19% of charities and 21% of businesses reported that staff were preventing from carrying out their work. The continued financial impact following some kind of breach can be very damaging to businesses as the costs could run to tens of thousands of pounds.

James Dalton, the ABI’s Director of General Insurance Policy, commented:

“Cyber insurance is a valuable product – the claims acceptance rates speak for themselves and the additional support a business receives, beyond dealing with the pure financial losses is a key attribute of most cyber insurance policies, too often overlooked.”

Must have for businesses

Cyber Insurance is becoming a must have for businesses wishing to protect themselves and their customers from breaches and attacks. It is particularly important for businesses who process and retain customer information and those who regularly take payments online. A typical policy would provide cover against the most common risks associated with cyber breaches:

Cyber extortion

If your business is targeted in a ransomware attack or cover for cyber extortion provides peace of mind that you would receive reimbursement of any ransom paid as well as the cost of professional or consultant fees associated with this.

Privacy breach costs

This element of a cyber security policy will cover your business against the cost of any breach, including additional staffing or measures needed to correct the breach and legal fees.

Business interruption loss

If you suffer an attach which causes an interruption to your business operations, insurance will cover your loss of income for the period of interruption and beyond.

Damage by Hackers

This protects your business from damage caused by hacking to your digital assets including protection against loss of data as well as data corruption or alteration of data.

Most policies will also cover you for liability if your digital media presence leads to a claim for libel, slander or defamation or any infringement of intellectual property rights as well covering the cost of support from cyber specialists in the event of a breach.

If you would like more information on cyber insurance, get in touch with one of our insurance specialists for advice tailored to your business.

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