London, 4th December 2015.
SME Sectors exposed to cybercrime
The SME sector is leaving itself wide open to serious crime risks according to new research from, risk management company, Aon Risk Solutions. At a time when The Government is set to double UK funding to £1.9bn to fight cybercrime, the new Aon study into the SME market suggests the clear and present danger of cyber risks are being overlooked by many SMEs. Just 4% said they had insurance cover in place to help protect them from the implications of cyber attacks, virtually no change from Spring 2015 (3%).
Further, following a period when security has been firmly in the spotlight, the new research reveals only one in twenty SMEs (5%) say they have cover in place for crisis management situations (including terrorism, ransom and product contamination).
These are some of the latest findings from Aon’s nationwide survey of 1,042 decision makers from the SME sector. Aon explored which types of insurance, if any, had been taken out by SME owners to protect their enterprises from unforeseen risks. The picture that emerged was of many of Britain’s SMEs not recognising the very real business risks posed by not having the right insurance policy in place to cover them against a range of risks – with more than one in five (22%) saying they have no insurance in place at all.
The research findings suggest businesses need to take a hard look at their exposure to a range of risks and assess whether they would be covered for potential risks such as damage to property or assets, product recalls, intellectual property theft, cyber crime or data breaches.
- With 78% of UK businesses having a variety of insurances in place to protect their business, the gap between small and larger businesses has widened this quarter. SMEs with a turnover of less than £1million are particularly exposed to employee injuries (29% vs. 56%), property damage (24% vs. 48%) and Health and Safety risks (11 vs. 35%).
|Insurance||Less than £1 million||£10 million +||Difference|
|Damage to property||24%||48%||+24%|
|Health and Safety||11%||35%||+24%|
The top five business priorities:
- Around two in five (39%) SMEs are covered for being sued for negligence, an increase of 4% on Q2 2015 (35%).
- One in three (33%) small businesses have insurance policies covering them against damage to property, including problems such as natural disasters and arson, an increase of 5% on the 28% in Q2 2015.
- 21% have taken out life insurance policies, a slight increase on the 18% in Q2 2015.
- Almost one in three (29%) businesses are covered against damage to fixed assets, a small increase on Q2 2015 (27%).
- Around two in five businesses (38%) have taken out insurance policies to protect against employee injuries and third party liabilities in the work place (33% in Q2 2015).
The Sectors at risk:
- Within the IT & Telecoms small business sector, only 5% of SMEs have policies to insure them against cyber attacks.
- Almost one in two (49%) businesses in the Finance and Accounting sector have put measures in place to cover them against being sued for negligence, and only 8% have policies protecting them against cyber attacks.
- One in two (50%) SMEs in the Manufacturing industry have taken out insurance policies covering the business against employee injury and third party liabilities.. Further only 30% of businesses in this sector have insurance in place to cover health and safety issues.
- Only 1% of media and marketing SME decision makers have taken out insurance to cover themselves against future crisis management or major incident (such as terrorism, kidnap, ransom, extortion, product contamination, piracy and political risk), whereas 24% have measures in place against being sued for negligence.
- Over one in three (35%) business within the Construction industry have policies in place covering them for damage to fleet vehicles, but only 8% have insurance against property risk management.
Chris Lee-Smith, MD, Aon Affinity, commented: “The SME sector is currently dealing with change on two fronts. On the one hand, many are preparing to gear their businesses up for growth, with one in two (50%) claiming a positive outlook for the months ahead. Set against this there have been a range of high profile cyber attacks and an increased feeling of insecurity in recent weeks underlining the uncertain world we live in. Cybercrime is a significant risk and security concerns should be top of mind for any business. Our research suggests that whilst general economic confidence in the SME sector is improving, many are over-looking the need to protect their business from very real risks that could derail growth plans.”
Whilst care has been taken in the production of this article and the information contained within it has been obtained from sources that Aon UK Limited believes to be reliable, Aon UK Limited does not warrant, represent or guarantee the accuracy, adequacy, completeness or fitness for any purpose of the article or any part of it and can accept no liability for any loss incurred in any way whatsoever by any person who may rely on it. In any case any recipient shall be entirely responsible for the use to which it puts this article.
This article has been compiled using information available to us up to 03/12/2015