Cyber Liability Insurance In The UK Has Huge Potential
It was only a matter of time before someone came up with an insurance product to protect businesses from being hacked and other cyber related maladies. According to a new report by Timetric, the market for cyber liability insurance remains largely untapped with a strong opportunity for growth. Why? Businesses are exposed to cyber threats such as hacking, extortion, and data leaks. The loss of business due to downtime and loss of functionality is another serious cyber threat to businesses.
A 2011 UK government report estimated that cyber crime costs the UK as much as GBP27 billion a year. GBP21 billion of this is estimated as costs to businesses. Of this GBP9.2 billion comes from theft of intellectual property, GBP7.6 billion for industrial espionage, GBP2.2 billion for extortion, GBP1.3 billion for online theft and GBP1 billion for loss or theft of customer data.
Thus insurance from these losses makes sense. As cyber liability insurance represents just 0.01% of the UK’s non-life insurance market, there is large scope for expansion. Cyber risk is not industry-specific; it spans financial services, healthcare, retail, charities, recruitment, e-commerce, legal services and any business using Information and Communications Technology (ICT).
You can bet that this sort of insurance will be coming to other nations shortly as cyber related maladies are not limited by borders.