SMEs Under Threat: The Need for Business Insurance
A recent report published by Experian suggests that many small to medium sized enterprises may be at risk of a serious security breach, and yet a startling number do not have business insurance to effectively cover digital and cyber crimes. ‘SMEs Under Threat 2016’ claims that nearly half of all small UK businesses (48 percent) do not have a business insurance product that would cover them in the event of a cyber attack, or in the event of accidental breaches in confidentiality that could affect customers.
Unfortunately, breaches in security are much more common than we like to think, with 74 percent of small businesses suffering a data breach in 2015. Here are just some of the reasons why ensuring your company has valid and suitable business insurance is an essential part of any disaster recovery plan:
Financial Peace of Mind
- A survey of SMEs shows that businesses, on average, estimate the recovery cost for a data breach to be around £180,000. In fact, the average cost of recovery is £310,000, suggesting that many are not prepared for full recovery. Business insurance with cyber attack policies provide peace of mind that financial assistance will be available if needed.
- According to the Experian report, more than half of all small UK businesses hold information relating to overseas customers, and yet 29 percent are unaware of how foreign law may affect them should a confidentiality breach occur. Business insurance with coverage for loss of confidential data may provide legal protection against any claims made from abroad.
- 23 percent of small businesses believe that their customers would turn to a competitor should a security breach occur. With a business insurance policy in place, along with a up-to-date disaster recovery plan, businesses can demonstrate to customers and the public how they have taken measures to ensure that data breaches are dealt with efficiently.
Despite heightening security measures, data breaches and cyber attacks can and do happen, and they can happen to businesses of all sizes, and within any sector or industry. Businesses can ensure they’re taking the necessary steps to prevent incidents, but it’s also essential not to overlook the importance of a good disaster recovery plan should the worst happen. Compare business insurance policies online to ensure your business has the protection it needs to get back on its feet quickly and easily.