Cyber Insurance: Myths vs Reality
Cybersecurity has become a boardroom priority, yet when it comes to cyber insurance, too many businesses are still falling for outdated myths. The result? Companies are left dangerously exposed to the financial and reputational damage of an attack.
Let’s cut through the noise and look at the truth behind some of the most common misconceptions.
Myth 1: “Cyber insurance is only for companies that handle customer data”
The reality: Even if you never collect customer details, your business almost certainly stores other sensitive information. Think about employee files; bank details, home addresses, sometimes even medical histories. To cybercriminals, this data is just as valuable as customer records.
Myth 2: “Our IT systems are strong enough—we don’t need cyber insurance”
The reality: Strong IT security is essential, but it isn’t bulletproof. Cyber threats evolve daily, and attackers specialise in finding cracks in even the most advanced systems. Then there’s the human factor: a single misplaced click on a phishing email, or one mistyped address, can open the door to a breach.
Cyber insurance doesn’t replace good IT security, it backs it up! It helps your business to recover when things slip through the net.
Myth 3: “We outsource our IT, so we’re covered”
The reality: Outsourcing reduces workload, not responsibility. Many cyberattacks bypass technical systems entirely, relying instead on social engineering, tricking employees into handing over passwords or sensitive information.
Even major corporations have fallen victim to such scams. What’s more, IT service providers often limit their liability in contracts, leaving you to deal with the consequences. Cyber insurance can provide crucial financial protection and crisis management support when that happens.
Myth 4: “Our general business insurance already covers cyber risks”
The reality: Standard business policies were not designed with modern cybercrime in mind. While they might include a degree of protection, they often exclude the very threats businesses face most today; ransomware, phishing, and even sophisticated deepfake scams.
Cyber insurance exists precisely because traditional policies can’t keep up with the evolving tactics of cybercriminals.
Myth 5: “Cyber insurance is too expensive”
The reality: Premiums vary, but the real question is whether your business could afford the cost of an attack. Beyond technical fixes and legal bills, the reputational damage alone can have long-lasting consequences.
Final Thoughts
Cyber insurance isn’t about ticking a compliance box, it’s about building resilience. A strong IT security strategy reduces your risk, but only dedicated cyber cover protects you from the financial and reputational impact when the worst happens.
Don’t let misconceptions leave your business vulnerable. Take time to review your cover, and make sure you’re protected for the risks of today.
Cyber risks can feel overwhelming, but getting the right cover doesn’t have to be. At Redwood Insurance Brokers, we keep things simple and straightforward so you can focus on running your business. Please feel free to call at your convenience 01268 776277.
