Cyber insurance helps mid-market businesses recover from the direct costs and operational impact of a cyber attack or incident. A strong cyber insurance policy covers first-party losses like downtime and data recovery, third-party claims, and post-incident response.
In the case of UK retailer M&S, the cost of the cyber incident has been reported at up to £300 million after factoring in ransom demands, downtime, legal fees and reputational damage AI Autopsy: Five Lessons From The M&S Ransomware Attack.
A strong cyber insurance policy will cover (but is not limited to) the following considerations:
- 1st party costs
- Business interruption
- Dependent business interruption
- Digital asset restoration
- Hardware replacement
- Extortion (Payment of ransom)
- 3rd part costs
- Defence fees & Court attendance costs
- Payment of regulatory fines
- Incident reponse
- IT Forensics
- Legal
- PR
- Ransom negotiator
- Credit monitoring
Why should cyber insurance be purchased independently?
Cyber attacks on businesses are becoming more common. The Cyber Security Breaches Survey 2025, published by the Department for Science, Innovation & Technology and the Home Office, found that 43% of UK businesses suffered a cyber breach or attack in the last year. Alarmingly, only 45% of respondents in the same survey report being insured against cybersecurity risk.
This should serve as a stark reminder to UK businesses of the cyber attack threat and the ripple effects they can trigger. From operational downtime and disrupted sales to the exposure of sensitive customer data and, ultimately, customer trust. Having the correct cyber insurance policy in place to cover these costs is imperative.
What are the benefits of a cyber insurance policy?
- A cyber insurance policy covers the cost of ransom or extortion. The median UK ransom demand in the last year was £3.9m, according to Sophos’ State of Ransomware in the UK 2025 report
- A cyber insurance policy offers a dedicated recovery team and a suite of incident response specialists to help the business react and move forward post-incident
- A cyber insurance policy pays out defence fees, court attendance costs and/or any payment of regulatory fines (The ICO fined 23andMe £2.31m for a data breach)
- A cyber insurance policy insures any business interruption costs or loss of revenue during downtime in a cyber attack
- A cyber insurance policy protects a business when a supply chain or 3rd party supplier is hit
How much limit of cover do businesses need?
Many organisations purchase cyber insurance without a clear understanding of the level of cover they require. This can result in overpaying for excess capacity or, more critically, being underinsured during a major cyber event.
Coverage limits vary widely. Mid-market organisations often purchase around £5 million cover, with increments typically rising in factors of five. However, the appropriate level of cover is never one-size-fits-all. It depends on a range of factors, including company size, annual revenue, data sensitivity, regulatory environment, and overall risk exposure.
Because of these variables, it is essential to partner with a specialist cyber broker who can understand your risk profile and appetite and help you determine an agreed limit of liability that provides meaningful protection without unnecessary excess.
FAQs
Do mid-market companies need a stand-alone cyber insurance policy?
Yes. Cyber risk is continuing to evolve at pace, so an insurance policy that covers direct costs due to a cyber attack is crucial. A gold standard insurance policy will cover covers first- and third-party losses and, crucially, offers post-incident forensic, legal, and PR support that you’ll need in the first 24 hours after an incident as standard.
Is a stand-alone policy more expensive?
No. A specialist cyber broker will be able to make sure you get the lowest premium for maximum coverage. Additionally, you receive a suite of valuable services from the broker and insurer.
How do I choose the right limit of cover?
The right limit depends on revenue, data sensitivity, and risk profile. Many mid-market firms buy around £5m cover, but it’s never one-size-fits-all. A broker will help quantify your exposure and negotiate the right limit.
Can cyber be included with other policies?
It can, but it’s ill-advised. An ‘all-in-one’ policy will often contain holes and leave businesses uncertain about their cover. A cyber policy will lay out all exclusions clearly.