Cybercrime is costing billions – is your business covered?

What is cyber insurance?

In today’s digital world, cyber threats are no longer a distant possibility, but a daily reality. From ransomware attacks to data breaches, businesses and individuals alike face growing risks. Cyber insurance is designed to protect against the financial consequences of these incidents.

With over half of UK businesses having fallen victim to at least one attack within the last year, it comes with little surprise that in the past three years alone, UK businesses have lost £64 billion to cybercrime, including ransom payments, lost business, and reputational damage.

Therefore, both the financial and operational risks of cybercrime in the UK are becoming an ever-growing risk and are impossible to ignore.

What protection does cyber insurance provide?

Cyber insurance provides financial protection against losses resulting from cyber incidents. These can include:

• Data breaches: Including the recovery of lost and corrupted data.
• Business interruption: Due to system outages.
• Regulatory fines: Coverage for penalties under laws like GDPR or the Data Protection Act.
• Third-party liability: Legal costs and damages if customer or partner data is compromised.
• Costs of forensic investigations and public relations.

Unlike traditional insurance, cyber policies are tailored to digital risks, and coverage can vary significantly between providers. For example, some policies may also cover cyber extortion and ransom payments or reputational harm, but these may require specific endorsements.

Common pitfalls in cyber insurance claims

Despite the growing need for cyber insurance coverage, claims can often be rejected leaving business without the protection they paid for. Common reasons for such insurer’s denial include:

• Failure to disclose vulnerabilities: Not informing insurers of outdated software or poor security practices.
• Policy exclusions: Attacks caused by employee negligence or unapproved third-party apps may not be covered.
• Delayed reporting: Waiting too long to notify the insurer can invalidate a claim.
• Non-compliance with security protocols: If your business did not follow agreed cybersecurity standards, coverage may be void.

How our insurance experts can support your business

Our Insurance Disputes experts act exclusively for policyholders, adopting a proactive and client-focused approach to help businesses and individuals secure the protection they paid for.

We recognise the need to act promptly when facing cyber incidents of this nature. As such, our dedicated legal team is committed to resolving disputes efficiently and effectively.

Please contact us on a no-obligation basis by telephone on 01202 057733 or by email on insurance@ellisjones.co.uk, if you would like us to discuss the position with you and so that we can provide details of how we can progress your matter.