Gap between SME risk and available insurance

by Richard Kilner

Story link: Gap between SME risk and available insurance

Insurers and businesses should collaborate to help make SME technology risks insurable, according to a report by NIG.

Over two thirds of SMEs are using broadband and the dependence upon the high speed connection is increasing.

The report is concerned that although some risks can be insured against the single largest danger SMEs face, the behaviour of staff, cannot be covered.

It is predicted by the report that there will soon be monitoring software available created by insurers and downloadable by policyholders. This concept is a critical issue for the development of truly comprehensive coverage, in the report’s view.

A gulf has opened up between the vulnerabilities of SMEs and the insurance coverage available to them, say NIG. The actions of staff members (such as accidentally or intentionally downloading computer viruses) are not covered by most insurance policies but are a large problem for SMEs.

The report’s main headlines are that one in three SMEs have no specialist IT support, or no support at all; one in four SMEs are using consumer grade broadband rather than business level services; three quarters of SMEs have no backup plan should their system suffer a disaster and require rebuilding from scratch.

Steve Kingshott, RBS insurance director, agrees with the report’s assessment that there is a gap between available insurance and risks faced by SMEs, singling out small business as the most at risk.

Kingshott expressed hope that the report might be the first step on a journey to the gulf being bridged and said that affordable protection against threats to IT and data was required.