Even small businesses may need cyber insurance

January 15, 2026

There’s no escaping it; we live in a world that is increasingly dependent on information technology. From the biggest corporation to the smallest business, there is almost certain to be at least some use of data relating to your customers, suppliers, or products. A lot of data like this is not only personal but also, therefore, highly sensitive.

That sensitivity can make even the smallest of businesses vulnerable to the threat of cybercrime.

How significant is the threat of cybercrime?

If you were in any doubt about the seriousness of cybercrime, just take a look at our previous posting on the subject, where we cite the National Crime Agency’s (NCA) warning that cybercrime is one of the most serious threats in the UK – including that from organised crime.

Whether your business is trapped in a net of organised crime or the victim of opportunistic theft of sensitive data, you stand to lose substantial sums of money and commercial reputation while your enterprise may come to a grinding halt. Not only might valuable customer information and details become compromised, but your business could face severe financial difficulty.

Why your small business may need cyber insurance

Cyber insurance in the UK can form part of your first line of defence against the financial losses you might suffer in the face of cyber-attacks, failures of your IT systems, or other data breaches.

Just as you’d expect, the details of any particular cyber insurance policy will vary from one provider to another, but the following are just some of the areas typically covered for events that have resulted in financial losses to your business:

As a result of a breach of the data you hold

• investigation to identify exactly what happened – how the breach occurred;

• notification of those customers affected by the breach;

• legal advice;

Following extortion or ransomware spread through cybercrime

• support throughout your attempts to negotiate with the cybercriminals;

• compensation for the financial losses and the costs of restoring stolen or encrypted data;

• the payment of any legally permitted ransom, where allowed under UK law and policy terms;

Financial losses through business interruption

• compensation for the loss of income to your business if its systems are taken offline;

• the cost of keeping your business running while the systems remain offline;

The cost of restoring your IT systems and their data

• the repair or replacement of stolen or damaged software and IT systems;

• the recovery or recreation of lost data; and

Software and platform damage

• compensation for the cost of repairing your website or sites, any damaged apps and programmes, and those digital platforms you might use.

Cybercrime might also result in claims made against you and your business. Examples might include claims made by your customers or employers who allege financial loss through exposure of their personal data; or claims that your IT systems let malware spread to other businesses or users.

Cyber insurance for businesses is designed to help indemnify you against such liabilities.

Further reading: The importance of cyber insurance.

Concerned that your small business needs cyber insurance?

Many small businesses are likely to depend – probably more than you might realise – on the information technology now widely available. But the ins and outs of how that technology works and the vulnerabilities to which you might be exposed may remain something of a mystery. That is a weakness that cybercriminals may seek to exploit.

Cyber insurance can help safeguard your business against such threats. If you remain uncertain about the way that cyber insurance offers the protection you need, please do not hesitate to contact us here at Alan Blunden Insurance Brokers  with your online enquiry or by telephone on 01702 826060.