Cyber insurance in the UK: Do you really know what it covers?
May 7, 2025According to the National Crime Agency (NCA), one of the most serious and organised crime threats to the UK is cybercrime. It leads to considerable losses of data, finance, and continuation of service – to the extent that businesses go bankrupt, public services become inaccessible and valuable customer data is compromised.
With threats on such a significant scale, the importance of cyber insurance has grown exponentially in recent years.
What is cyber insurance?
Cyber insurance indemnifies you against and compensates you for the losses you and your business may incur as a result of cybercrime.
Those are the losses that can result from ransomware attacks and the loss or theft of data, interruption of your business, any legal costs in pursuing recovery, and the PR or crisis management costs your business might typically incur.
Cover against such losses is not typically incorporated in most general business or home insurance policies. It is a standalone policy.
Why is the need for cyber cover increasing?
The government’s Cyber Security Breaches Survey for 2024 revealed a 30% increase in cyber offences in the past 12 months.
The survey found that half of all businesses (50%) and around a third of charities (32%) reported some type of breach in cyber security or attack in the previous year. Medium-sized businesses fared worse with 70% of them experiencing such attacks, while 74% of large businesses suffered still more attacks.
By far the most common type of cyber-attack or breach comes from phishing (which struck 84% of businesses). Lower rates of attack came in the form of emails or an online presence purporting to be another individual or organisation (reported by 35% of businesses), or other malware, including viruses (17% of businesses).
All the while, of course, businesses of all shapes and sizes throughout the UK are increasingly reliant on digital systems – especially in an age of more and more remote working – and the handling of sensitive data.
Do people understand the importance of cyber insurance?
Although recent surveys suggest that more and more businesses understand and appreciate the importance of cyber insurance, information from the British Association of Insurers (ABI) emphasises just how wide-ranging is the protection it offers.
Little wonder, therefore, that few people appreciate the importance of cyber insurance in protecting against any “cyber event” – any actual or even a suspected attempt to access your digital systems resulting in financial losses involving the direct theft of data or funds and damage to your digital resources.
There continues a common misconception that regular business insurance will suffice or that its provisions will cover the losses you suffer through cybercrime.
Who needs it most?
The impact of cybercrime on SMEs – especially those offering professional services, retail, healthcare, and financial services – is severe, says the National Crime Agency (NCA).
SMEs are likely to be particularly vulnerable because of their access to fewer of the most up to date digital protection systems available to large corporations.
Finally
If you remain in any doubt about the likely importance of cyber insurance for your business, please do not hesitate to contact us on 01702 826060 – we’d be delighted to help.
Further reading: The importance of cyber insurance