Cyber Cover to be Mandatory in a Decade
June 21, 2015
Cyber cover will become a business essential within ten years, according to the Association of British Insurers (ABI). Already cyber attacks are a huge financial drain—annually they cost the UK economy an estimated £620 million. Yet, in spite of the growing threat of cyber attacks to both the public and private sectors, only about 10 per cent of large businesses have any form of cyber cover, according to the ABI. This small figure reflects businesses’ widespread ignorance of cyber cover’s benefits, despite the general acknowledgement that cyber attacks are one of businesses’ biggest threats. This lack of cover can be quite costly—both financially and for a business’ reputation.
Cyber attacks can vary in severity and type—ranging from the theft of personal customer information to the theft of money or property. An average of 68 per cent of funds lost as a result of cyber attacks are declared as unrecoverable, according to industry research. For that reason alone, businesses should fortify their defences with cyber cover. Here are five additional reasons why cyber cover will become a necessity for doing business within the next decade, according to the ABI:
1. Requiring only an Internet connection, cyber attacks are one of the fastest growing forms of crime in the world.
2. Cyber threats are evolving alongside digital and wireless technology, which makes it difficult to develop matching defences.
3. With the expanding relevance of digital technology in day-to-day operations, businesses are increasingly dependent on IT for their success.
4. Depending on the severity of the cyber attack, a business may be forced to close or to dramatically change how it operates.
5. The British insurance market is already able to offer businesses the innovative cyber protection that they need.
The threat of cyber attacks has already become commonplace for businesses, regardless of size and industry. With the potential financial damage that cyber attacks can inflict, financial experts warn that, depending on the size of the business, £1 billion in cyber cover may be required to adequately protect a large organisation. While that may seem like an exorbitant amount, the damage caused by cyber attacks has far-reaching effects beyond just the immediate financial loss. Cyber attacks can threaten your customers, whose private information may have been compromised, and damage the trust of both the public and your investors. Indeed, 79 per cent of investors said they would be discouraged from investing in a business that was hacked, according to a recent global survey conducted by professional services firm KPMG.
Insuring your business with cyber cover demonstrates that you are committed to safeguarding valuable data and ensuring compliance. Contact CLA Insurance today to defend your business against the increasing risk of cyber attacks.