Shielding your business: the importance of cyber insurance in 2024

For most businesses, digital plays a pivotal role in operations, communications, and transactions. The increasing reliance on technology brings a heightened risk of cyber threats. In 2024, the need for robust cybersecurity measures has never been more pressing. For business owners, investing in cyber insurance has become not just a wise choice but a critical necessity to help deal with the aftermath of a cyber attack.

The escalating cyber threat landscape

The UK has seen a sharp increase in cyber attacks over the past few years. According to recent Government statistics, an estimated 32% of businesses reported cybercrime in 2023, amounting to 2.39 million cybercrime incidents.

The financial implications of cyber incidents are substantial. The same report revealed that the average cost of a cyber breach for UK businesses is £15,300. Importantly, though, this figure doesn’t account for the financial implications of business interruption incurred due to breaches and attacks, which can last for weeks or months.

The costly consequences for businesses

The impact of cyber attacks extends far beyond financial losses. For businesses, the fallout could include reputational damage, data or software loss, legal liabilities, and operational disruption.

Furthermore, the regulatory landscape has become increasingly stringent. The General Data Protection Regulation (GDPR) imposes hefty penalties on organisations that fail to adequately protect sensitive data. With fines of up to £17.5 million or 4% of global turnover (whichever is higher), non-compliance with GDPR can threaten businesses’ financial viability.

The crucial role of cyber insurance

Cyber insurance policies provide assistance in the aftermath of a wide range of cyber incidents, including hacks, data breaches, ransomware, and malware attacks.

Cyber insurance providers also offer proactive support and resources to help businesses mitigate risks and enhance their cybersecurity. From incident response services to cyber risk assessments, these services can help businesses better protect themselves and educate employees on the cyber threats they face.

Our case study provides more information about how cyber insurance acted when a high-street retailer was hit with a ransomware attack.

Things to consider to protect your business

• The cyber security of your suppliers and any other links in your supply chain
• Your password policies and multi-factor authentication
• Employee training
• Backing up data regularly
• Access controls to sensitive data, as well as to physical items, such as your server
• Putting an incident response plan in place
• Software updates and system patches
• Firewalls, antivirus and antimalware software

If you have cyber insurance, your insurer may have specific cyber security requirements as a condition of providing cover. If this is the case, your broker will explain these to you.

The National Cyber Security Centre has a helpful guide to cyber security for businesses, which you can find here.

As businesses navigate the complexities of the digital landscape in 2024, the importance of cyber insurance cannot be overstated. By investing in cyber insurance, businesses can mitigate financial risks, safeguard their reputation, and ensure continuity in the face of cyber threats. In an era where cyber attacks are not a matter of if, but when, cyber insurance provides reassurance that should the worst happen, there will be financial and practical support to get your business back on its feet.

To find out more, speak to your broker direct or contact us on 01603 218000.