’Strong IT security measures don’t negate the value of cyber insurance,’ says cyber product lead
CFC has revealed that IT departments are the “biggest obstacle” for brokers to overcome when selling cyber insurance policies to customers.
In a statement released yesterday (5 October 2023), the specialist insurance provider revealed that almost half (49%) of brokers said they experienced resistance from a client’s IT lead or department about not needing cyber cover.
CFC warned that there was a “long-held misperception amongst IT professionals” that cyber insurers would pitch insurance as a replacement for security controls.
“The reality is vastly different,” Philippa Berry, cyber product leader at CFC, said.
“Despite best efforts, cyber attacks can still happen. Just as putting locks on your doors doesn’t negate the need for property insurance, strong IT security measures don’t negate the value of cyber insurance.”
These figures came after 277 brokers responded to a poll that was taken during CFC’s Selling Cyber in 2023 webinar.
The survey also revealed that brokers cited cost as a major hurdle to overcome, saying that clients felt cyber insurance was too expensive.
However, in September 2022, Aviva found that 10% of more than half a million small and medium sized enterprises (SMEs) would not survive if a payment of up to £10,000 was required to support a claim that was not fully covered by insurance.
And the government’s 2023 Cyber Security Breaches Survey, which was published earlier this year (13 April 2023), revealed that cyber attacks were costing businesses an average of £15,300 in losses.
“Price is always an issue, but the cost of a cyber claim is so much greater,” Berry added.
CFC said its cyber insurance solution combined cover with incident response and protection that would identify cyber threats targeting policyholders and alert them through a response app.
“A good cyber policy will not only transfer the financial risk associated with a cyber event, which can be substantial, but also offers an additional layer of proactive services to help prevent an attack from happening in the first place,” Berry said.
“Ultimately cybercrime is costing UK businesses of all sizes, but in particular smaller organisations, billions of pounds each year.
”Rather than being mutually exclusive, IT departments and proactive cyber insurers like CFC can work hand-in-hand to afford businesses the best possible protection against cybercrime at a price that reflects the necessary level of protection and support.”
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