What's Happening?
Specialist insurer CFC has introduced a new extension to its Cyber Proactive Response cover, specifically targeting small- to medium-sized enterprises (SMEs). This extension addresses customer business interruption (BI) events, providing protection for SMEs that suffer financial losses due to major customers canceling orders following a cyber attack. The initiative was partly inspired by the cyber attack on Jaguar Land Rover, which highlighted vulnerabilities in supply chains dependent on major customers. CFC's Head of Global Cyber Underwriting, Scott Bailey, emphasized the need for such coverage, noting that while direct cyberattack impacts on businesses have been addressed, the exposure faced by small businesses due to a customer's cyberattack had
not been fully covered until now. This coverage is available globally and is applicable across all industry sectors.
Why It's Important?
The introduction of this coverage is significant as it addresses a critical gap in the insurance market for SMEs, which are often vulnerable to the ripple effects of cyberattacks on their larger customers. By providing financial protection against such disruptions, CFC's extension helps stabilize the short-term financial health of SMEs, which are crucial to the economy. This move could encourage more SMEs to adopt comprehensive cyber insurance policies, thereby enhancing their resilience against cyber threats. Additionally, it underscores the growing recognition of supply chain vulnerabilities in the digital age, prompting insurers to innovate and offer more tailored solutions.
