Tips and AdviceAdministrative and Support Services
25th September 2025
Get cyber smart: how to better cover your business from the impact of a cyber incidentSmall business owners often assume that cyber criminals target corporate organisations, so you might be surprised to hear that research shows three quarters of ransomware attacks are directed at small to medium enterprises (SMEs).With this in mind, let's chat about something of vital importance: covering your business from the financial, operational, and reputational fallout of cyber incidents. Here are six key things you should know about cyber risk and cyber insurance, to keep your business safe from the ever-growing impact of cyberattacks:
1.
Know what’s covered: Cyber insurance policies generally cover both first-party and third-party liabilities. First-party coverage handles things like IT security costs, system repairs, business interruption, reputational damage, and even cyber extortion. Third-party coverage kicks in for legal defences, settlements, and damages if someone sues you over a cyber incident. Make sure you understand both types of coverage.
2.
Focus on prevention: Insurers might want you to implement certain cybersecurity practices to qualify for coverage. This could include regular vulnerability assessments, employee cybersecurity training, multi-factor authentication, and data encryption. Not only do these steps reduce your risk, but they can also show insurers you're serious about cybersecurity, potentially lowering your premiums.
3.
Have a plan: A solid incident response plan is crucial. This plan should spell out exactly what to do if a cyber incident occurs, from notifying affected parties to containing and recovering from the breach. It should also include communication strategies and details on engaging legal and forensic experts. Insurers may require you to have this plan and might even help you develop it.
4.
Stay compliant: Be aware of data protection and privacy regulations. Non-compliance can lead to hefty fines and penalties if you suffer a data breach. Many cyber insurance policies cover fines and penalties for regulatory violations, but it’s important to understand the terms and conditions of your policy.
5.
Keep evaluating: Cyber risks are always changing, so regularly review and update your insurance coverage. Conduct periodic risk assessments, review your policy terms, and stay informed about new cyber threats. This ongoing evaluation ensures your coverage stays relevant and effective.
6.
Ensure it's customized: One size doesn’t necessarily fit all with cyber insurance. Make sure the policy you take out has been tailored to fit the specific needs of your business. This could mean adjusted coverage limits, adding endorsements for particular risks, or a policy that incorporates protections unique to your industry. Customisation is key to getting the right coverage.
By getting a good grasp of these aspects of cyber risk and insurance, you can better shield your small business from the negative impacts of cyber incidents and technology-related risks. Stay safe out there!
