Cyber-insurance 'not worth paper it's written on'

Reseller bosses warned against the use of cyber-insurance during a panel session at the recent CRN Online Security Summit.

More UK firms are taking out cyber-liability insurance policies to mitigate against the growing threat of data breaches, a trend that worried some of the experts on our panel.

"It's not particularly expensive, and [customers] feel that all of a sudden they've got another tick in the box," said Marty Legg, cloud services director at SecureData.

"But I feel it is an immature way of dealing with it," he added during the debate, which you can register to view here.

Garry Sidaway, senior vice president of security strategy at NTT Com Security, agreed: "I understand why people are going that way but actually when it comes to a breach or an incident, it's really not worth the paper it's written on," he said.

These misgivings come after figures from Lloyd's of London suggested the UK cyber-insurance market grew by 50 per cent in Q1.

In light of these figures, Richard Pharro, chief executive of accreditation body APM Group, warned that cyber-insurance should not be seen as a "cure-all".

"While cyber-insurance may offer the opportunity for those hit by cyberattacks to recoup some of their monetary losses, little can be done to repair the reputational damage brought by a data breach, the negative impact on trust and lost intellectual property," he said.

Sidaway and Legg's comments were made during the opening session of CRN's recent Online Security Summit session - Time for a New Approach to IT Security - which you can register to view here. Also participating in the debate were David Lannin from Sapphire, Mark Evans from Integrity Solutions and John Shaw from Sophos.

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• Strategy