The rise of relevance for Cyber insurance
It seems you can’t click or click a page these days without seeing a nightmare tale about a hack or cyber security breach. According to a recent government report, 81% of large businesses and 60% of small businesses suffered a cyber security breach in the last year, and the average cost of breaches to business has nearly doubled since 2013. How, if at all, should you protect your business?
Firstly, try and have a policy — explore the guidance of standards like ISO/IEC27001. For most of us, though, Cyber Insurance should become as common a purchase for UK businesses as property insurance within the next 10 years. Don’t take my word for it, that’s according to the Association of British Insurers.
Who should be buying it? If you’re reliant on cloud services, run a cloud service, keep hold of Personally Identi able Information for customers, or data from payments – this should already be on your radar. Beyond that, these products often cover the very real risks associated with using social media and content marketing-defamation, copyright and IP complaints. Surprising to many a blogger, I’m sure.
Fortunately, not only is the UK home to the second-fastest growing startup ecosystem, it’s also home to the third-largest insurance market in the World – well stocked for such a need. Our insurers currently underwrite a whopping 10% of the global cyber market.
Plug alert: there’s quite a range of choice brewing. My brand, Worry+Peace, soon launches a panel accessing (directly/through wholesale channels) most of it. According to that same government report I cited, there are about 13 major carriers in the UK looking at this class.
It’s not always expensive, either, prices can be from as little as £150. Be warned, though, because it’s quite a new product range, the applications can take longer than others to fill out. Have a cuppa ready, or a nice broker to fill them out with you.
So, what’s the global worse case scenario? There’s a way the insurance sector checks it has all bases covered — realistic disaster scenarios stress test their ability to cover a mega-bad thing. Their estimate for a Cyber “RDS” is about £20bn. Currently, the market reckons it can muster circa-£60bn if needed to cover broader RDSs. That’s a pretty sizeable context for a little-known class of insurance — Cyber. Makes you think, I hope.
[author title=”James York” image=”http://thefintechtimes.com/wp-content/uploads/2015/12/jamesYork.jpg”]James is the Founder of Worry+Peace, the modern insurance store and concierge. [/author]