Under one in four (22.4%) of small to medium enterprises (SMEs) with cyber insurance report to be covered for human error, according to leading data and analytics company GlobalData’s 2019 UK Insurance Consumer Survey. Given that the penetration rate of cyber insurance for SMEs in 2019 was 34.6%, the majority of SMEs in the UK are leaving themselves vulnerable to cyber-attacks.
Total losses from Coronavirus-related cyber-attacks in February 2020 alone, were estimated by the police to be over £800,000 from 21 separate cases in the UK. The phishing attacks have either claimed to have an attached list of people with the virus or have even asked the victim to make a bitcoin payment for it.
Ben Carey-Evans, Financial Services Analyst at GlobalData comments: “One way of combating this is with preventative measures. Some cyber insurers focus on preventing attacks to reduce payouts and avoid lasting damage for companies. A key form of this is in training staff, especially in how to spot phishing emails, to make sure they are not letting hackers into their systems.”
Preventative policies are more expensive but are arguably worth the risk to avoid disruption. The percentage of SMEs that do not have cyber insurance but would be interested in it, is slightly higher than the existing numbers for both categories. This suggests that both have growth potential, though it is still under one in four (23.9%) for human error and one in five for staff training (18.6%).
Carey-Evans concludes: “The issue for companies, and consequently insurers, is that there are so many different elements to a cyber-attack that even a comprehensive policy is unlikely to cover all risks or losses.
“Potential claims categories such as reputational damage, physical damage, ransom payments, business interruption, data breaches, and phishing would be included in human error.
“Human error will be the cheaper category to be covered against, and this is likely why it is more popular. However, as high-profile cyber-attacks continue to emerge, and hackers prey on topical fears, having a properly trained workforce may be the safest option for businesses.”