Adoption of cybersecurity-related insurance grew 50% in the UK between 2015 and 2016, driven by fears of an online attack and the introduction of upcoming European data laws, a leading underwriter has revealed.
CFC Underwriting, which provides cyber insurance to over 20,000 clients globally, polled representatives from the industry at the 2016 Cyber Symposium in London late last year.
Some 23% claimed the “fear factor” of a costly attack had driven them to invest in insurance, while even more (26%) cited the European General Data Protection Regulation (GDPR) as a factor.
When introduced in early 2018, the EU GDPR will levy harsh penalties of up to 4% of global annual turnover for erring companies, and stipulates that data breaches must be notified within 72 hours.
Over half (53%) of respondents claimed that electronic computer crime will likely lead to an increase in insurance claims, followed by “non-physical business interruption” (25%).
A spokesperson clarified to Infosecurity the difference between the two categories.
“Nonphysical business interruption refers to any business interruption caused by non-physical perils (ie not a flood, fire, physical theft, quake etc.) – so this could include system downtime caused by cybercrime, but also general technology failures that mean the business can't operate,” they said.
“Electronic computer crime is different – it refers not to the business being able to operate normally, but mainly to the costs associated with the theft of data.”
The figures follow ones released by CFC Underwriting last month which revealed the extent of the cyber threat to UK firms.
It claimed to have handled over 400 claims on cyber policies in 2016, a 78% increase on 2015.
“There is a huge exposure out there for businesses and there is still a certain complacency amongst them that they have it under control,” said Lloyd’s CEO, Inga Beale. “At Lloyd’s we are seeing huge cyber insurance uptake, and last year we introduced 15 different types of cover just for cyber, in anticipation of this demand rising in 2017.”