CFC has introduced a new extension to its Cyber Proactive Response policy for small and medium-sized enterprises. The product, called customer business interruption, is designed to address contingent business interruption events stemming from cyberattacks.
The cover responds when a policyholder faces financial loss due to a major customer cancelling orders following a cyber incident. CFC said the extension is available globally by endorsement on its flagship SME cyber policy.
The product launch comes as CFC has reported a 30% increase in cyber incidents among its UK policyholders over the past year. Lindsay Maher, head of global cyber development at CFC, said 90% of the claims seen from a cyber perspective in the UK over the last 12 months have been for businesses with less than £50 million in turnover.
Scott Bailey (pictured above), CFC's head of global cyber underwriting, said the product was developed in response to supply chain vulnerabilities exposed by recent incidents. He cited the cyberattack on Jaguar Land Rover as an example.
"The cyberattack suffered by Jaguar Land Rover demonstrated acute vulnerability in the supply chain because of dependence on one major customer whose business has effectively been shut down by cyber criminals," Bailey said.
Bailey said that while cyber insurers have covered direct attacks and supplier-related incidents over the past 25 years, the exposure faced by businesses when a customer is hit has not been fully addressed. He described the extension as filling that protection gap.
The cover is aimed at businesses that receive a material proportion of revenue from a single customer. CFC said the product is suited for manufacturing and wholesale/distribution sectors but is available across all industries and geographies.
CFC has served as BIBA's dedicated cyber insurance scheme provider since 2004. The customer business interruption endorsement will be available to BIBA members across the UK.
Graeme Trudgill, BIBA chief executive, said SMEs face a risk of reduced demand if companies at the top of their supply chain suffer a cyberattack. "This is a new and helpful insurance solution for insurance brokers to provide to their clients," Trudgill said.
