Cyber attacks are no longer a question of if but when. As cybercriminal tactics evolve at pace, organisations face an ever-growing risk from ransomware, data breaches, and operational disruption. The financial, regulatory, and reputational consequences of these incidents can be severe – particularly for small and medium-sized enterprises (SMEs) that may underestimate their exposure.

Cyber insurance is often cited as a key tool to mitigate financial losses from breaches. Policies can cover business interruption, ransomware payments, legal fees, regulatory fines and crisis communications. Some insurers also provide access to specialist support, including digital forensics teams, legal counsel and IT recovery experts. Yet insurance alone is not a guarantee of resilience. How a business responds in the critical hours and days following an incident often determines the ultimate scale of damage.

Despite this, many organisations still delay or avoid investing in cyber insurance. According to a 2025 UK Government survey, 34% of businesses did not consider cyber insurance a budget priority. SMEs in particular often perceive themselves as low-risk targets, especially if they do not directly handle sensitive data. In reality, companies that interact with larger organisations in complex supply chains, or indirectly handle sensitive information, may be far more vulnerable than they realise.

As new regulations increase the penalties for breaches, cyber insurance can play a vital role in mitigating the financial impact of cyber attacks.

The implications of not having cyber insurance

The financial stakes are high. Under the General Data Protection Regulation (GDPR), companies can be fined up to EUR€20 million (or 4% of global annual turnover) for breaches involving personal data.

Beyond regulatory penalties, the reputational damage following a breach can be long-lasting. Recent high-profile incidents illustrate the scale of the risk: the ransomware attacks on Co-op by the DragonForce group reportedly led to substantial costs, prolonged recovery and intense public scrutiny. Co-op reportedly lacked cyber insurance coverage for ransomware.

Similarly, Marks & Spencer’s exposure via a third-party access control vulnerability is expected to result in an estimated GBP£300 million profit loss due to prolonged business interruption, despite increases in insurance coverage before the incident. These examples underscore a critical point: insurance alone cannot restore lost trust, customer confidence or operational continuity.

Furthermore, reputational damage can take a heavy toll, especially if the company struggles to recover.

Cyber Resilience: The Critical Companion to Cyber Insurance

This is where cyber resilience comes into play. A strong cyber resilience strategy combines preventative measures, robust detection and response capabilities and well-practised recovery protocols.

Key elements include:

• Incident response planning: well-documented, tested procedures enable organisations to respond quickly, contain breaches and reduce the impact of attacks.
• Data management and recovery: regular backups, encryption, and secure storage practices help limit the potential for data loss.
• Proactive security measures: multi-factor authentication, endpoint protection, network monitoring and threat intelligence reduce vulnerability to attack.
• Collaboration and expertise: coordinating internal teams with external experts ensures rapid investigation, containment and remediation of incidents.

The Power of Expert-Led Incident Response

Rapid, professional incident response is particularly critical when dealing with sophisticated cyberattacks. Organisations with access to experienced digital forensics teams can quickly identify affected systems, understand the scope of a compromise, and implement effective recovery measures – often within hours rather than days. This ability to act decisively not only mitigates financial losses but also helps maintain compliance with regulatory obligations and preserves stakeholder confidence.

Moreover, cyber resilience is an ongoing investment. Threats evolve, technologies change, and business processes shift. Organisations that regularly review and update their incident response plans, conduct simulated breach exercises, and invest in staff training are better equipped to respond effectively. Conversely, companies that rely solely on insurance coverage without practical response capabilities risk exacerbating the financial and operational impact of breaches.

Ultimately, cyber insurance and incident response are complementary. Insurance provides a financial safety net, but its benefits are maximised only when combined with proactive planning, robust security practices, and access to expert response services. Businesses that integrate these elements are far more likely to contain incidents quickly, reduce long-term damage and resume normal operations with minimal disruption.