Report: Most SMBs Don’t Know What Cyber Insurance Is

Social media and other online tools for their business, but they're not always sure what their liability is in the event of a breech, and don't know there are ways to protect themselves.

Small businesses rank social media use near the top of tools used for business, but these businesses are not always as security savvy as they should be. According to a report from market research firm Software Advice, decision makers at SMBs are unsure about cyber insurance. In fact, most don’t even know cyber insurance exists.

John Wheeler, research director for Gartner defined cyber insurance as:

protection against losses related to cyber-risks, such as data theft/loss, business interruption caused by a computer malfunction or virus, and fines or lost income because of system downtime, network intrusion and/or information security breaches.

According to the report, only 33 percent of survey respondents knew what cyber insurance was. Adoption rates are even lower, with only two percent of respondents stated they already had insurance. However, 16 percent were very interested, 36 percent were moderately interested, and 32 percent were minimally interested.

One of the problems for cyber insurance, is that the market is very young. As a result, many businesses don’t understand what cyber insurance does for them. When researching insurance, 31 percent of businesses are trying to understand their liability in the event of a breach. 20 percent are trying to understand premiums for insurance, 16 percent want to know the likelihood of a breach, and 14 percent are trying to understand the breadth of coverage they will receive.

Other data from the report shows how SMBs are falling behind when it comes to implementing good security practices, and that decision makers have a hard time understanding the financial costs involved in security breaches. For more data on best practices, view the report.

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