Aviva, a UK insurance provider, is making a strategic move by introducing an affordable cyber insurance policy exclusively for micro-enterprises.
This initiative comes in response to a glaring market gap, as a recent survey by GlobalData revealed that a staggering 83.8% of micro-enterprises, including sole traders, lack cyber insurance.
To put it into perspective, micro-enterprises are small businesses with fewer than ten employees. In stark contrast, 58.6% of small-sized businesses (less than 50 employees) and 47.5% of medium-sized businesses (less than 250 employees) also remain uninsured against cyber threats.
The reason behind this disparity is multifaceted. Micro-enterprises often operate on tight budgets, making them reluctant to invest in what they perceive as an additional expense. Many may also not fully comprehend the potential risks associated with cyber threats.
Surprisingly, almost half of those without cyber insurance (47.1%) believe their company is unlikely to fall victim to a cyberattack.
Aviva says its solution, Aviva Cyber Respond, has been purpose-built to protect these very small businesses from cyber threats. The company says it offers a cost-effective alternative to the comprehensive coverage usually aimed at larger enterprises and a policy can be secured for as little as £50, depending on individual circumstances and the selected coverage level. Furthermore, Aviva has waived excess fees to reduce costs further.
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The primary barrier to cyber insurance adoption among micro-enterprises is cost. GlobalData’s 2023 UK SME Insurance Survey reports that 15.7% of these small businesses consider it too expensive. Additionally, 15.5% claim they hadn’t even heard of cyber insurance before. Aviva’s new policy is poised to tackle both these issues head-on.
By offering affordability and tailored coverage, Aviva is helping bridge the awareness gap and encouraging micro-enterprises to prioritise cybersecurity.
This move by Aviva is a significant step in the right direction. To drive cyber insurance adoption among micro-enterprises, other insurers must follow suit. By developing budget-friendly, micro-enterprise-specific policies and raising awareness about the importance of cybersecurity, the industry can empower these small businesses to protect themselves effectively in an increasingly digital world.