What is cyber insurance?
Cyber insurance is a specialist type of business insurance focused on the cyber security of your business. It can help to cover your costs and losses if your business falls victim to a:
- Data breach
- Security failure
- Illegal threat
- Cyber attack
In the event of a cyber attack, it can also help to cover the cost of additional business expenses as well as data recovery costs and public relations costs.
Such risks include cyber crime, which can take many forms. Fortunately, Hiscox insurance covers computerised attacks designed to disrupt or prevent access to a network, device or system.
An unsuspecting employee might click a malicious link, locking everyone out of the email system – this is known as phishing. Alternatively, a hacker could manipulate website databases via SQL injection or use ransomware to demand large sums of money.
Digital threats can also arise from within your business – an employee may accidentally share sensitive customer data, for instance.
Cyber insurance – our guide
Watch how Hiscox cyber and data insurance helps a business recover from a ransomware attack by deploying a team of IT experts.
Do I need cyber insurance?
Any business, contractor or freelancer using the internet as part of their work could fall victim to cyber crime or face a data breach which insurance might help to resolve.
This means enterprises of all shapes and sizes could stand to benefit from cyber insurance. Nonetheless, certain professions may have a greater need than others.
If your business operates primarily online or you handle large amounts of information, then cyber cover could play an important role in risk management.
A marketing agency which experiences accidental data loss may face a privacy complaint leading to steep legal fees, for instance.
Meanwhile, an IT consultant who relies on multiple software packages could lose income if these are locked by ransomware.
Management consultants and accountants could require reputational support if a cyber attack impacts their public image, while insurance brokers may incur additional expenses as they race to recover a compromised system – all kinds of professions can benefit from having the right cyber cover in place.
Not sure what you need?
Tell us about your business – we’ll help you to build your cyber insurance quote and explore any other insurance needs.Build my cover
When should I get cyber insurance?
Around two-thirds of companies (64%) now have cyber insurance, according to the Hiscox Cyber Readiness Report 2022.
Our report shows that more than 48% of businesses reported a cyber attack between 2021 and 2022. The stakes are getting higher, too. The median cost of an attack rose 29% to just under $17,000 US dollars, according to the report.
These problems can affect businesses of all sizes. Start-ups may encounter social engineering trickery, such as phishing, as soon as they begin communicating digitally.
Likewise, any company with a website could experience hacking – and data breaches could affect their very first spreadsheet.
This means it may be prudent to consider cyber security, and relevant insurance, from the early days of doing business.
How much cyber insurance cover will I need?
The optimal amount of cyber cover for your business depends on how much it would cost to get back on track after a worst-case-scenario cyber attack or data breach.
This approach can help to ensure you aren’t left with insufficient funds in the event systems go down for an extended period, or criminals make a big ransom demand.
Understanding the nature of cyber threats may help you to recognise the extent of risk to your business.
The Hiscox Risk Academy could help with this – it’s an online risk assessment platform with cyber training that our cyber policyholders receive automatic access to.
Is your business cyber ready?
Tell us about your business and answer a few quick questions about your cyber practices. We’ll give you a cyber health check rating to help you understand any risks and how you can improve.
What’s included in your cyber cover?
At Hiscox, we know the impact of cyber security events can be wide-reaching, so our insurance provides cover to match. It spans direct losses to your business, response costs and fees for recovery services.
Your cyber insurance cover includes:
- Protection against privacy investigations
- Help to recover your position where there’s reputational damage
- Forensic investigations to aid data recovery, plus legal advice
- Help notifying regulators after an attack
- Repair or replacement of unusable parts if cyber events damage your equipment
- Indemnity for losses incurred if your supplier faces a breach
- Consultancy support
- Liability support if someone alleges you’ve transmitted a virus
- Support with crime, including hacking, theft and employee fraud
- An optional, customisable business interruption benefit – if your turnover is less than £2.5m
As of 2023, we offer optional financial crime and fraud cover. This offers protection against electronic theft of money or securities belonging to you, and fraudulent use of your electronic identity, for example taking out a credit card in your name.
There is also an option to add cover for income loss due to interruption resulting from a data breach or cyber attack.
For businesses with annual turnovers of less than £2.5m, this is available in the form of a daily business interruption benefit with cover for 30 days. If your annual turnover is above £2.5m we may be able to pay for your loss of income or increased costs of working.
Who is eligible for Hiscox cyber and data insurance?
You can apply to take out a Hiscox cyber insurance policy for businesses across a wide range of areas, from accountancy to construction and telecoms to transport. We work with businesses across:
- advertising and marketing
Another factor we consider is the size of your business.
If your business has an annual turnover of less than £2.5m, then you may enter into a slightly different product pathway if you add optional cyber interruption cover.
- Small businesses with turnovers below £2.5m are eligible to receive a daily interruption benefit for 30 days.
- Larger businesses with turnovers above £2.5m are eligible to receive payment from this optional cover in another way. This might include paying directly for your loss of income or increased costs of working.
Cyber insurance FAQs
What examples are there of cyber crime?
Examples of cyber crime often hit the news. Large organisations have been held to eye-watering ransoms, as was the case with the WannaCry ransomware attack, or mass phishing attempts result in ordinary people losing large sums.
Read examples of recent cyber-attacks to learn how instances of photograph theft and cloud-based data breaches have affected well-known organisations.
Are cyber criminals targeting SMEs?
Cyber criminals can and do target small and medium-sized enterprises (SMEs), since most businesses use technology, from large financial services firms to small hair salons using digital forms for bookings.
Read our Cyber Readiness Report to discover the cyber risk profiles of small and large businesses. We also have a report dedicated to statistics in the technology, media and telecommunications (TMT) sector.
Are there any real-life examples of Hiscox cyber insurance claims?
Yes – one example of a Hiscox cyber insurance claim started when a customer of ours arrived at the office and quickly noticed something wasn’t right.
They’d recently upgraded systems to boost speed for customers. Unfortunately, hackers were able to lock the servers.
Specialists were drafted in to regain control of the servers, manage reputational damage and identify gaps in the company’s cyber security systems. Read the full story to learn the depth of support Hiscox can provide.
Cyber insurance articles and guides
Cyber insurance articles and guides
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