Business owners lack cyber insurance knowledge: survey

One out of every five Canadian businesses surveyed said they don’t know enough about cyber insurance, suggesting an open window for brokers and insurers to provide educational support, a new cyber survey from Travelers Canada suggests.

“I think what the survey shows, from a broker standpoint, is that clients are really looking for that education and assistance piece,” Michael Trendler, managing director of specialty insurance at Travelers Canada, told Canadian Underwriter last Tuesday. “Twenty-one per cent of the respondents said that they would be interested in cyber but they don’t know enough about it. And half of them said, ‘We would be interested in cyber coverage if it comes with a level of guidance from both the broker and the insurer.’

“So, I think that really points to opportunity [for brokers to highlight] services that often come with cyber policies. The third-party services are huge to the insured.”

Examples of third-party cyber services would be IT firms to deal with network repair, legal firms to deal with claims, and public relations firms to help restore the client’s reputation and rebuild trust with customers.

Conducted in June 2023, the Travelers Canada survey canvassed the opinions of 500 business decision-makers across small- and medium-sized Canadian companies. The Travelers Canada Risk Index provides a snapshot of risk viewpoints of companies in various industries, including transportation, health care, construction, banking and financial services, real estate, manufacturing, technology, professional services, wholesalers, retail and nonprofits. The survey was offered in French and English.

Overall, 61% of respondents considered cyber threats their top overall concern. And 60% believe they will eventually be the victim of a cyberattack.

“It was the top overall concern in the survey, more than [they were concerned about] the impact of the global economy, broad economic uncertainty, and retaining and attracting talent, which is a pretty big concern. It’s interesting that cyber is on their minds even more than these other risks.”

Related: What’s driving rising ransomware attacks

Attacks are becoming more common for Canadian businesses, the survey shows. Two out of five (40%) of respondents reported they have experienced a data breach — many happening within the past two years. Of those who reported a breach, 70% said they had experienced more than one cyber event.

Respondents reported the most common types of cyberattacks were:

· Unauthorized access to computer systems (38%).
· Unauthorized access to technology networks or industrial control systems (31%).
· Phishing emails (29%).
· Ransomware attacks (27%).

The world of cybercrime is moving quickly. Some cyber experts in the property and casualty insurance industry have reported that ransomware attacks have increased recently, after a dip in the statistics. The pace at which the cyber security world works presents yet another opportunity for brokers and insurers to provide guidance to their business clients, said Trendler.

“Another thing that came out of this survey is that about three-quarters of folks mentioned they really find it hard to stay on top of cyber trends,” said Trendler. “The news from a cyber standpoint moves lightning-fast. And if you’re not a cyber person, if you’re just running a bricks-and-mortar business, how hard is it to keep in tune with that news, right?

“So they really need that guidance. They need that news piece. I think that’s a real opportunity for brokers, to be able to offer some level of guidance [alongside] the cyber experts.”

Feature image courtesy of iStock.com/Prostock-Studio