British firms have no cyber security insurance

insuranceIf a hacker takes out a large UK company, it appears that most of the time the company will have to pay out to fix it. Less than two percent of large British firms have separate insurance against cyber-attacks. Hardly any smaller firms have it..

The UK government has issued a report responding to concern that companies are not protected against the risks of cyber-attacks, which cost billions of pounds annually to the UK economy.

The report, published jointly with insurance broker Marsh, recommends that the government and the insurance industry pool data and information to encourage take-up of cyber insurance.

Half of the business leaders interviewed for the report did not even know cyber insurance existed, it said, even though many firms place cyber attacks among their leading risks.

“Cyber attacks against UK companies present a daily threat to normal UK business operations and are increasing in severity,” the report said.

Of course the government did not think that direct government financial support was needed in the cyber insurance market.

“While some market participants have suggested that a possible government backstop may be necessary, there is no conclusive evidence of the need for such a solution at present,” the report said.

The government supports terrorism insurance scheme Pool Re, through a commitment to make up the shortfall if the scheme runs out of money to pay a claim.