Less than 13% of small and medium-sized businesses (SMBs) have cyber-insurance, potentially leaving large numbers exposed to the serious financial impact of online attacks, according to GlobalData.
The data analytics and consulting firm claimed in its 2020 UK SME Insurance Survey that the mid-market represents a potentially lucrative one for insurers, given the relatively small number currently covered for cyber-related losses.
GlobalData senior analyst, Daniel Pearce, argued that the need for specialized insurance coverage was even greater as distributed working has expanded the corporate attack surface and created security gaps which attackers are keen to exploit.
“The pandemic has increased businesses’ reliance on technology in order to operate during lockdowns, while social distancing guidelines continue to promote home working. With this growing dependence on technology comes an increase in cyber-risk,” he added.
“Given this, the need for cyber-insurance has arguably never been higher. Traditionally, cyber-insurance has seen greater levels of uptake and interest among mid-market and larger corporations, but the pandemic has accelerated the need for smaller business to purchase cover as well.”
Healthcare has been one of the sectors hardest hit by cyber-attacks, especially ransomware, over recent months. In fact, a German patient died recently after an attack forced her to be transferred to a different hospital, delaying treatment by an hour.
Accordingly, in the health and social work sector, cyber-insurance coverage is almost double the average, at 26%.
The findings chime with a poll of UK businesses by insurer Gallagher earlier this year which found that 82% did not have any specialized coverage for cyber-related incidents. Crucially, nearly half (46%) of respondents from mid-sized firms said they thought that cyber-attacks are “mainly an issue for bigger organizations.”
Yet despite the eye-catching headlines of major security incidents at large multi-nationals that cost millions of dollars to fix, a large number of attacks seek out the lower hanging fruit of smaller businesses.
Ransomware was the number one cause of insurance claims in North America in the first half of 2020, according to Coalition.