Common Objections to Buying Cyber Insurance
The Cyber threat landscape is constantly evolving, with cyber attacks becoming more sophisticated and prevalent than ever before. Despite the rising risks, many businesses hesitate to invest in cyber insurance, leaving themselves vulnerable to potentially enormous consequences. Here are the top five reasons why businesses may be reluctant to purchase cyber insurance:
1. Cost Concerns
One of the primary reasons businesses avoid cyber insurance is the perceived cost. Some organisations may believe that the premiums associated with cyber insurance are too high and simply think it won’t happen to them. However, the cost of recovering from a cyber incident, including legal fees, regulatory fines, and reputational damage, can far exceed the expense of cyber insurance premiums. Overcoming this concern involves demonstrating the potential cost savings in the event of a cyber incident compared to the financial fallout of not having insurance. Sharing some statistics from the recent Clyde & Co whitepaper on average costs:
2. “My IT team have it covered”
Many businesses mistakenly believe that their existing cyber security measures and IT team (including MSP’s) are are
sufficient to protect them from cyber threats. They may have invested in firewalls, AV software, and employee training
programs, leading them to believe they are adequately protected. However, cyber criminals are continuously devising
new techniques to exploit vulnerabilities, making it essential for businesses to have comprehensive insurance
coverage as an additional layer of protection. Emphasising that cyber insurance complements, rather than replaces,
effective cybersecurity measures can help them understand its importance.
3. Uncertainty of Coverage
Uncertainty of coverage: There is often confusion surrounding what cyber insurance covers and what it does not.
Some businesses may believe that their other insurance policies already provide adequate coverage for cyber
incidents, failing to recognize the specific risks addressed by cyber insurance, such as data breaches, ransomware
attacks, and business interruption due to cyber events. Clear communication about the scope of coverage offered by
cyber insurance can help dispel these misconceptions.
4. Lack of Awareness
Many small business owners are not fully aware of the extent of cyber risks or the insurance options available to
them. Providing clear and accessible information about the types of cyber threats they may face and how insurance
can mitigate those risks can increase awareness and understanding.
5. “They won’t target us!”
Some businesses may believe that they are unlikely to experience a cyber incident or be underestimating the severity
of potential consequences. This optimism can lead to complacency and a reluctance to invest in proactive risk
mitigation strategies such as cyber insurance. However, cyber threats can affect businesses of all sizes and
industries, educating them about the increasing frequency and sophistication of cyber threats, as well as the
potential impact on their business, can help dispel this misconception.
While there are several reasons why businesses may hesitate to purchase cyber insurance, the importance of
mitigating cyber risks cannot be overstated. By addressing these concerns and understanding the value that cyber
insurance provides, businesses can better protect themselves, their assets, reputation, and ensure continuity of
operations.
Email. cyber@360uw.com.au Tel. 1800 411 580 Web. 360uw.com.au/cyber
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