Cyber risk is considered to be one of the most serious issues facing both individuals and business, yet only 2% of large companies have purchased standalone cyber insurance. In an article for Insider Quarterly, partner Nick Gibbons, discusses common cyber risks and the need to close the cyber risk gap for both the insurance and businesses.
“Despite the enormous sums of money invested in cyber insurance marketing, significant numbers of businesses are either unaware of the existence of cyber cover at all or wrongly assume that they have cyber cover in their existing insurance policies. Recent surveys by Marsh and Zurich found that 52 percent of CEOs believe that their organisation has cyber insurance, whereas in fact only 10 percent do. More effective gap analysis by insurers, brokers and insureds is helping to resolve this problem.
“Ineffective or non-existent cyber security at potential insureds renders the risk unattractive to many underwriters, even if the potential insured does want to buy a cyber policy. SMEs, which make up 99 percent of businesses (and therefore, the potential market) often have very little idea about how to make themselves secure. Other larger businesses that rely on their IT department or consultant to address cyber security tend to focus on technical defences only, and fail to implement staff policies and procedures and physical security effectively, or don't address perimeter risk.”
To read Nick’s article in full, visit the Insider Quarterly website.