Tom Draper, Coalition’s UK Managing Director, said: “Our research shows that many SMEs shifted their insurance priorities away from cyber insurance cover during the hard cyber market, and have not returned since the market has improved its offering. However, this year, it’s been difficult to avoid seeing the consequences of a cyber attack, with big brands and high-profile organisations hit with disrupted operations and large recovery bills. Our survey shows that these events are now spurring decision makers into action, with 30% saying it has encouraged them to review their cyber insurance or request standalone cyber insurance quotes.”
The survey also found that businesses report being more vigilant about cyber risks (38%) and more aware of the importance of cyber insurance (37%). Yet, an alarming number (35%) still feel that the risk does not outweigh the cost of buying cyber insurance cover, and a similar proportion (33%) still believe they are unlikely to suffer a cyber incident. Given that the majority of respondents estimated the cost of a cyber incident at around £200,000, this appears to be a risky, and potentially expensive, decision.
Encouragingly, the research reveals that the recent high-profile incidents in the headlines this year have positively impacted businesses’ preparedness. Nearly two-fifths of businesses said they feel secure because they have a plan in place to handle a cyber incident, 36% of respondents have allocated more budget to cybersecurity, and 35% have reconsidered the level of cover needed to protect themselves.
Draper added that while high-profile incidents have prompted some businesses to take positive steps, they are lulling others into a false sense of security. “We have seen several high-profile cyber incidents this year, and while it raises the profile of cybersecurity and the importance of having robust cybersecurity systems in place and adequate insurance, it can also lead to the perception amongst SMEs that cybersecurity is a ‘big company’ issue.”
“While major retailers, food, and consumer companies like Jaguar Land Rover and M&S have the resources – and often the cyber insurance – to weather such incidents, most SMEs lack both the financial resilience and the resources to recover quickly. Cyber risk is no longer just an IT issue; it's a fundamental business continuity threat that smaller and midsize firms must urgently prioritise."
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