Most British firms ‘not insured for cyber crime’, research finds

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More than half of firms in the UK incorrectly believe they have insurance that will cover them in the event of a cyber attack.

More than half of companies in the UK do not have adequate insurance to protect them from costs related to cyber crime, despite the fact such incidents are on the rise.

This is according to research from MoneySuperMarket, which revealed that 52 per cent of firms incorrectly believe they will be covered for such an eventuality under their general business insurance.

However, this is not the case, as the price comparison service warned that most policies will not include this protection, which means businesses would need to take out a seperate, dedicated cyber crime policy to ensure they are protected.

MoneySuperMarket's insurance expert Rose Howarth said: "Most organisations simply take out a policy for common risks, such as water leaks, accidental damage and theft.

"Yet cyber breaches are increasingly common, with over 57,526 happening in the last three months alone, according to government data."

Another issue may be that businesses do not fully appreciate the level of risk they face. MoneySuperMarket's research found that many companies still identify themselves as 'offline' businesses, despite the fact 98 per cent of private firms rely on some form of digital service or communication.

The study found 92 per cent of firms use organisational email, while 83 per cent rely on a website or blog, and 76 per cent of enterprises hold an online bank account.

However, the Insurance Times noted as many as 75 per cent of deliberate attacks against businesses are related to fraudulent emails, so many companies may be exposed to these threats.

MoneySuperMarket also noted that human error remains the biggest single cause of data breaches, which it said emphasises the need for better staff awareness and internal cyber security training.

The costs of failing to prevent a cyber attack can be huge, particularly for larger firms. For example, an analysis of the Marriott hotel chain's recent data breach by AIR Worldwide estimated that costs could reach as high as $600 million (£473 million) – before taking into account any potential financial penalties under laws such as GDPR.

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