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Embrace cyber insurance or face costs alone, report warns

Only 2% of UK companies have opted for separate insurance for cyber attacks.

By CBR Staff Writer

Despite the growing number of cyber attacks, half of UK businesses are unaware about cyber insurance with many of them saying that this lack in protection is one of the major risks facing businesses.

According to a report published by the UK Government, along with insurance broker Marsh, only 2% of UK companies have insurance dedicated to cyber attacks.

The report also finds that cyber insurance adoption among small companies is almost negligible.

The report, cited by Reuters, added, "Cyber attacks against UK companies present a daily threat to normal UK business operations and are increasing in severity."

The report has suggested that there should be an information exchange between the UK Government, companies in London and the Association of British Insurers, in order to protect companies against costly cyber attacks.

The report, however, did not support financial support from the government for the cyber insurance market.

"While some market participants have suggested that a possible government backstop may be necessary, there is no conclusive evidence of the need for such a solution at present," it added.

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Earlier in November 2014, UK government had set up a working group in this regard which pegs London cyber insurance market is worth $238m.

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