Cyber insurance, A business essential?

Cyber insurance, A business essential?

Updated April 2022.

Cyber insurance has rapidly become one of the most discussed requirements for modern businesses. An increased reliance on the cloud for storing information, accompanied by the general adoption of more connected devices, has led to a surge in opportunities for cybercrime. And, with at least 1,243 security incidents disclosed in 2021, it seems these opportunities aren’t being passed up either.

Many breaches aren’t reported, as larger businesses don’t want to draw attention to their losses or publicly admit liability and small businesses don’t make the papers. However, for those that are reported, it may be surprising to learn that 43% of cyber-attacks now target small businesses. For these and many reasons, having a good cyber insurance policy in place is vital for businesses of all sizes.

Often, when we consider those companies that really need cyber liability insurance, we think of high-tech companies like software developers, systems analysts, or IT providers. While it is true that these businesses are especially at risk, really any business or trader that stores customer emails, has a customer database (CRM system) or simply uses a computer network in day-to-day operations can be at risk from cyber-attack and should invest in cyber security insurance. It doesn’t matter if you’re an investment bank or a private landlord; the risks are real for everyone.


Cyber insurance is an offering that is sold under many different names, including cyber security insurance, cyber liability insurance, network security insurance and privacy insurance. There is no standard form to which the industry adheres to underwrite cyber coverage, so it can be confusing for businesses to understand the cover each policy offers.

Cyber insurance coverage can include a variety of general risks, such as:

  • Data breach – Protection following an unintended release of private customer data
  • Data breach prevention – Helps with potential third-party expenses for identification and prevention of breaches
  • Security breach – Coverage for any customer damages incurred due to a network security breach
  • Cyber extortion – Covers the expense of paying extortionists to unlock your data or website
  • Regulatory expense – Helps lower the costs incurred to comply with breach notification laws

Specific cover can also be obtained for theft and fraud, forensic investigations, crisis management and credit or identity monitoring. Exclusions can include a whole host of hardware and software issues, as well as anything defined as an ‘act of war’. As with many policies, these exclusions can vary from provider to provider, and so all individually considered policies should be examined carefully to understand what coverage you will receive.

Understanding the different features of your coverage can not only ensure you get the best value for money from your policy, it can also be the difference between having a claim approved or declined. Cyber insurance claims can be denied, usually for four main reasons:

    • Late or improper notifications
    • Lack of understanding of coverage provided
    • Exclusions within the contract language
    • Not involving the network carrier early enough

If you are involved in online or offline retail, any professional or legal services, distribution, manufacturing or technology, cyber insurance can help reduce your exposure and protect against potentially huge financial losses.


Cyber insurance should never be a substitute for good security practices. However, it can be a massive help to companies when navigating the risk transfer side of technology, which often strays into territories not covered by conventional property and liability coverage.

At OBF Insurance Group, we understand the cyber threats that face modern businesses and can offer a cyber insurance product that meets the specific needs of your organisation. Our dedicated team offers broker-to-broker facilities and access to domestic and UK markets. Whether you wish to limit your liability for data, require help with meeting and/or reducing administrative obligations or you need to manage your reputation and response costs, we can create a truly bespoke cyber insurance policy for your business. Plus, we offer options to cover multimedia liability as well as network interruptions.

If you wish to discuss possible scenarios or simply learn more about our cyber insurance policies and protection options, please contact us today.


Other useful cyber insurance news items:

Why Cyber Insurance is Essential in 2021

4 simple reasons why you should have Cyber Insurance

How to Insure your Business against Cyber Security Risks



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