As more businesses move operations online and handle customer data digitally, the risk of a cyber incident — from a data breach to a ransomware attack — has become a significant concern for companies of all sizes. Cyber insurance is a product category that has grown in response to this risk, and understanding what it covers and when it is relevant is increasingly important for UK founders.
Cyber insurance covers a business against the financial consequences of a cyber incident, which may include the cost of investigating and containing a breach, notifying affected customers, legal costs arising from data protection claims, regulatory fines in certain circumstances, business interruption losses caused by a system outage, and reputational management costs. The scope of cyber policies varies significantly between providers, and what is and is not covered should be checked carefully before purchasing.
Cyber insurance is particularly relevant for businesses that hold significant volumes of personal data, process online payments, or depend heavily on digital systems for their day-to-day operations. Small businesses are as likely to be targeted as larger ones, and the impact of an incident can be proportionally more severe. Our guide to cyber insurance for UK businesses explains what policies typically cover and how to assess your exposure.