In recent months, the UK has seen a spate of ransomware, data breaches and cyberattacks that serve as a warning: no organisation is immune. It’s not just about prevention anymore – having the right insurance in place is as critical as all the technical defences and policies.
What can we learn from these cyber attacks?:
- Attack vectors are diverse
It’s not just about ransomware encrypting data. There are data thefts, supply chain vulnerabilities, third-party service providers, and social engineering (helpdesk impersonation, etc.). BBC+1 - Operational disruption can be acute
It’s not only financial loss. When operations shut down (online sales, delivery, production), there’s reputational damage, potential regulatory penalties (data protection law), customer loss, and secondary supply chain effects. - Detection speed and containment matter
For example, Harrods’ ability to take systems offline quickly limited data loss. In contrast, in some cases the attackers were inside networks for weeks before being noticed. Reuters+1 - Regulatory, reputational and legal consequences
GDPR / UK Data Protection rules mean that data breaches can lead to enforcement, fines, and requirement to notify affected individuals. Public trust is fragile, especially when sensitive data (children, employees) is involved. - Cost is rising
The losses are large – lost revenue, cost of remediation, possibly ransom payments, legal and PR costs. In addition, we’re seeing (per brokers & insurers) upward pressure on cyber insurance premiums and possibly stricter policy terms/coverage limits. Commercial Risk+1
Why Insurance Is as Critical as Prevention
While prevention is absolutely essential (good hygiene, robust backup, staff training, identity / access management, third-party risk management, etc.), insurance plays a complementary and in some ways equal role:
- Mitigating financial fallout
Even with best defences, breaches happen. Insurance helps with immediate and downstream costs: legal, forensic investigations, notification costs, PR/reputational repair, business interruption, ransom (if agreed), regulatory fines (where permitted), and cyber extortion. - Supporting crisis response
Many policies include or make accessible incident response teams (forensic experts, legal counsel, communication consultants). Quick, competent help can massively reduce exposure. - Regulatory compliance
Some regulation or contractual obligations require proof of cyber cover; having a policy in place may be a legal or business requirement. - Stakeholder reassurance
Customers, partners, investors increasingly expect that firms are resilient – if things go wrong, that there is insurance to pick up the pieces. It builds credibility and trust. - Red-team effect on prevention
Knowing that insurance is in place often forces companies to ensure that their controls are up to standard, because insurers will typically require certain minimum security practices as part of underwriting (e.g. MFA, regular backups, patching, incident response plans).
How Markham Special Risks Can Add Value
When advising your clients, you can emphasise how Markham Special Risks offers capabilities that help protect them should an incident occur:
- Tailored cyber / special risk insurance
Markham understands the evolving cyber threat landscape in the UK and can arrange policies designed to cover the full spectrum of risk: from ransomware & extortion to data breach costs, business interruption, supply chain disruption, etc. - Access to expert incident response
In the event of a cyber event, time is of the essence. Markham Special Risks partners with forensic investigators, legal specialists, PR/crisis-management experts, so that clients can mobilise quickly to reduce damage. - Pre-breach advisory services
Working with clients to assess their cyber hygiene: how good their backups are, how well they manage third party / supplier risk, whether they are applying multi-factor authentication, whether employee awareness & training is robust. These help reduce both the probability of breach and the cost in terms of premiums. - Claims handling expertise
Markham brings experience in navigating regulatory / legal aftermath (e.g. reporting to ICO / data protection authorities), handling ransom negotiation (where necessary), and assisting with reputational / customer communications. - Flexible terms in a changing market
Insurance markets are tightening. Markham aims to help clients find cover that fits their risk profile, avoid unnecessary exclusions, and secure competitive terms while ensuring clients meet the required security controls.
What can you do?
- Review with clients their current cyber risk exposures and identify gaps in prevention AND insurance cover.
- Encourage clients, especially SMEs, to invest in both technical defences and appropriate insurance.
- Stay abreast of insurer requirements — many policies are now demanding more rigorous security standards as part of underwriting.
- Use Markham Special Risks as a partner to help place robust cover and to respond quickly and effectively when incidents strike.
The recent wave of attacks shows that cyber risk is no longer theoretical. For many businesses, prevention alone is not enough – proper insurance is part of the foundation for resilience.
As brokers, steering clients toward comprehensive protection (both defensive and financial) is more important than ever – and that’s where Markham Special Risks shines.