London, UK - Despite a growing number of high profile technology breaches impacting UK businesses, only 16% of small business entrepreneurs buy protection against the potentially devastating impact of cyber risks according to a survey by specialist insurer Hiscox.
As the reliance on technology continues to grow for small businesses, the realisation that the increased online vulnerability of the business to a wide range of risks such as fraud, breach of privacy and virus transmission, has not kept pace.
Gary Head, UK Underwriting Director, at Hiscox said: “If the ‘slip and trip’ was one of the main sources of old fashioned liability claims against businesses, then the rapid growth of the internet could see it replaced by the ‘click and trip’ liabilities of doing business online. Legal suits for defamation, breaches of privacy or fraud can literally be one ill advised click away and small business entrepreneurs must not underestimate the threat to their hard earned business.”
The research also found that while internet and email insurance is the least popular business insurance purchase, directors’ and officers’ cover for the smaller business continues to be similarly unfashionable.
Of the 90% of survey respondents who bought some form of business insurance, public liability is the most popular, and very often a legal requirement, followed by office contents and professional indemnity.
Insurance cover bought by small business entrepreneurs (%)
1. Public liability (77%)
2. Office contents (70%)
3. Professional indemnity (65%)
4. Employers’ liability (65%)
5. Office buildings (55%)
6. Personal accident cover (44%)
7. Directors’ & Officers’ (22%)
8. Internet and email insurance (16%).
Despite technology playing a greater role in the business life of an entrepreneur, the majority still prefer to buy their business insurance directly from a broker either face to face or over the phone (52%). Buying online however is gradually picking up pace with 22% buying online either via a broker or direct with an insurer.
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Survey Methodology
The research was conducted by The Survey Shop using a Dun & Bradstreet database, between May 27 and June 27, 2008. A total of 350 telephone interviews were conducted with the owners of office-based companies in the professional services sectors, with each company employing up to 50 employees.
About Hiscox
Hiscox, headquartered in Bermuda, is an international specialist insurance group listed on the London Stock Exchange (LSE:HSX). There are three main underwriting parts of the Group – Hiscox Global Markets, Hiscox UK and Europe, and Hiscox International. Hiscox Global Markets underwrites mainly internationally traded business in the London Market – generally large or complex business which needs to be shared with other insurers or needs the international licences of Lloyd’s. Hiscox UK and Hiscox Europe offer a range of specialist insurance for professionals and business customers, as well as high net worth individuals. Hiscox International includes operations in Bermuda, Guernsey and USA. Hiscox Insurance Company Ltd, Hiscox Underwriting Ltd, Hiscox ASM Ltd and Hiscox Syndicates Ltd are authorised and regulated by the Financial Services Authority.
For further information, visit www.hiscox.com