Insure your UK Cyber Liability Risks

RnRMarketResearch  have just published a report on the UK market for Cyber Liability or e-Insurance as some others would describe it.

They reckon it currently has a pretty small take up with only a total of £3-£4 million premium income representing something like 0.1% of total non-life premiums.  

They also estimate there are something like 4.8 million private businesses in the UK which sounds like a reasonable number and agrees with the Federation of Small Businesses (FSB)  figures at the beginning of 2012. Nearly all of these (the FSB estimates 99.9% of private sector businesses) are SME’s.

If and it’s a BIG IF the 0.1% was applied to the 4.8 million businesses this would mean that under 5,000 businesses had such insurance. We think its’s likely to be more than that but still a comparatively small number

“Firms collect, manage and store data electronically, social media interaction has increased and portable computing devices are growing in popularity. This technological evolution increases exposure to cyber threats such as hacking, extortion, data leaks and business downtime.”

“Industry surveys suggest that firms are unaware of cyber liability products. It is likely that managers believe these intangible risks are covered by their existing commercial liability insurance policies, but traditional policies do not tend to address issues related to the internet or electronic data.”

Quite so and we would hope and expect that long term most small business combined policies would cover most of these risks or at least have such coverage as an option.

Looking at arguably one of the leading UK providers, of Cyber Liability Insurance, the risks they cover are those arising from the business usage of the internet and would cover reinstatement and legal costs as well as damages awards (and possibly even ransom demand reimbursement) arising from *for example:

  • Data use infringements
  • Hacking
  • Virus – transmission / receipt but not production!
  • Defamation
  • Identity fraud
  • Intellectual property rights infringements (excluding patents)

The (very approximate) cost for a sole trader for cover of say £250,000 could be less than £100 with a £500 excess.The cover we saw varied from as low as £25,000 up to over £1 million where the premium was still only just over £200.

With increasing website and social media usage on the business front alongside growing mobile access via smartphones and tablets it’s an area definitely worth considering.

We were disappointed to see that amongst the inevitable “small print” of the particular provider that we looked at there was a standard limitation to bushiness in the Eu only. hmmmmm!

* These are simply short form examples and the devil is in the detail concerning restrictions and exclusions!

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