Why Now is the Perfect Time to Think About Cyber Insurance

Cybersecurity may not be a new buzzword. But recent events have made it more important than ever to take a fresh look at your cyber insurance options. The UK Government is rolling out new initiatives to boost cyber resilience. So, there’s no better moment for companies to ensure they are well-protected. You can find cyber insurance policies starting from just £430 +IPT, giving you peace of mind in our increasingly digital world.

Introduction to Cyber Risk

Cyber risk is a significant concern for businesses of all sizes and across all industries. As technology advances and more businesses rely on digital systems, the risk of cyber-attacks and data breaches increases. Cyber insurance policies can help protect businesses against financial loss resulting from cyber threats and exposures. Cyber insurance cover is designed to provide comprehensive coverage for businesses. This can include certain costs in the event of: 

• a breach; 
• security failure; 
• or cyber attack.

Cyber insurance policies can help businesses recover from cyber incidents. For example, data breaches, ransomware attacks, and phishing. It supports recovery by covering costs associated with business interruption, and income loss.

Understanding the Risks

The world of cyber threats is always changing, and it’s crucial to stay informed. Here are some common cybercrimes that should encourage you to review your coverage:

• Ransomware attacks. These attacks can lock you out of your own data, often demanding hefty ransoms for its return.
• Data breaches. Losing sensitive customer information can hurt your finances and reputation. You can also incur legal costs.
• System outages. If you’re locked out of your systems, your business could come to a standstill, leading to lost revenue.
• Phishing scams. These tactics can trick your employees into giving away confidential information. This puts your business at risk.
• Malicious software. Malicious software, such as malware and ransomware, can infiltrate your systems. This can lead to data theft and significant operational disruptions.

Even the most tech-savvy individuals can fall victim to cybercrime, making it crucial to stay informed.

The Cost of a Cyber Incident

The financial fallout from a cyber incident can be overwhelming. For instance, a claim related to a ransomware attack can involve significant defence costs. This could include legal fees and settlements. Just think about how long it would take for your business to recover from a system outage—days, or even weeks? While ransomware attacks and data breaches often grab the headlines, being locked out of your systems can be just as damaging. For example, a recent incident with M&S reportedly cost them around £3.8 million a day in lost online sales while they were offline. This really highlights the urgent need for adequate cyber insurance.

Many businesses still operate without adequate cyber cover. And they are exposed to significant financial losses, including costs related to data destruction.

Current Cyber Insurance Market Conditions

In the past, many businesses viewed cyber insurance as too expensive, leading them to skip coverage altogether. However, recent statistics show a positive shift in the market. According to Marsh’s (our parent company) latest Global Insurance Market Index, cyber insurance premiums have dropped by 8%. With 78% of clients enjoying lower rates. This trend is part of a broader decline in global commercial insurance rates. These fell by 3% in the first quarter of 2025—the third consecutive decrease after seven years of increases.²

The cyber insurance cost varies based on several factors, including business size, industry, and the types of data held. Now, with coverage available from as little as £430 +IPT, protecting your business is more accessible than ever. Customers are taking advantage of this competitive landscape to: 

• negotiate better terms with their insurer; 
• enhance their cover; 
• and explore alternative risk solutions like self-insurance.

Business Interruption and Cyber Insurance

Business interruption and cyber insurance are closely linked. Cyber insurance policies can help businesses recover from cyber incidents that cause business interruption. Business interruption cover is an essential aspect of cyber insurance policies. This is because it helps businesses recover from the financial losses caused by a cyber incident. It can provide coverage for loss of income and increased costs of conducting business. By having a cyber insurance policy that includes business interruption cover, businesses can protect themselves against the financial losses caused by a cyber incident.

Cyber Crime and Its Impact

Cyber crime is a significant threat to businesses. It has the potential to cause financial losses, reputational harm, and legal costs. Cyber attacks, such as ransomware and phishing, can have a devastating impact on businesses. causing business interruption, data breaches, and financial losses. Cyber insurance policies can help businesses recover from cyber crime by providing coverage for the costs associated with responding to a cyber incident, including legal fees, compensation payments, and business interruption. By having a cyber insurance policy, businesses can protect themselves against the financial losses caused by cyber crime.

What Cyber Insurance Covers

Traditional insurance policies often don’t provide enough protection against today’s cyber risks. So, how does cyber insurance work? Dedicated cyber liability insurance typically covers a variety of incidents, including:

• Data breach response. Costs for notifying affected parties and managing public relations, including privacy breach and privacy liability.
• Business interruption. Compensation for lost income during system outages.
• Legal fees. Coverage for legal expenses that arise from cyber incidents.
• Forensic investigation. Costs for investigating security breaches and securing your systems.

Ensuring You’re Insurable

To secure cyber insurance, it’s essential to have certain measures in place. Start by checking out our 12 key controls to strengthen your cybersecurity. While having cyber insurance is crucial, it doesn’t replace the need for solid risk management. Consider the potential impact of a cyber loss on your business and take proactive steps to mitigate risks. Here are some key elements to have in place:

• Regular risk assessments. Identify vulnerabilities in your network security and address them quickly.
• Incident response plans. Prepare your team to respond effectively to cyber incidents and recover from security failures.
• Employee training. Educate your staff on recognising and preventing cyber threats, including how to avoid falling for deepfakes.
• Security audit. Undergo regular security audits to identify vulnerabilities and ensure compliance with insurer requirements.

Now is the time to take action! Contact us today to review your cyber insurance cover. Protect your business from the ever-evolving cyber landscape and ensure you have the right safeguards in place. To find out more visit our cyber insurance page or take a look at our guide to small business cyber security.

Sources

1. theguardian.com/inside-the-marks-and-spencer-cyber-attack-chaos 
2. Marsh Global Insurance Market Index, Q1 2025