Why the gap between cyber security and cyber insurance is growing and what it means for businesses
Most businesses today are aware of cyber risk.
They’ve heard about ransomware.
They know phishing is a problem.
They’ve likely been asked questions about cyber insurance.
But awareness isn’t the issue anymore.
Understanding is.
Recent data from the UK Government shows a clear pattern:
- Many businesses believe they are covered
- Few fully understand what that means
- And even fewer can confidently evidence what’s actually in place
That gap is where problems tend to start.
The gap between awareness and understanding
This is where many businesses get stuck. They know cyber insurance exists, but far fewer feel confident about what it covers or what insurers expect from them.
Aware of cyber insurance
Most SMEs know cyber insurance exists and recognise that cyber risk is part of modern business.
Say it is very clear
Only a small proportion say the information they receive from insurers or brokers is very clear.
The awareness vs understanding gap
A large number of UK SMEs are now aware of cyber insurance.
But only a small proportion say it has been clearly explained to them.
That creates a situation where:
- businesses assume they are protected
- decisions are based on partial information
- and risk is underestimated
It’s not a lack of effort.
It’s a lack of clarity.
Businesses know the risk - but don’t act on it
Another pattern that stands out:
Many SMEs say they are concerned about cyber incidents.
At the same time:
- a significant number do not have cyber insurance
- many rely on informal approaches or assume they can “deal with it if it happens”
This isn’t unusual.
It’s how most business risk works. Until something happens, it’s easy to believe it won’t.
What the data is really telling us
The numbers paint a clear picture - businesses recognise the risk, but there’s still a gap in action and understanding.
When cyber incidents become business problems
Cyber incidents rarely stay just technical for long.
They quickly become:
- operational disruption
- delayed payments or payroll
- lost revenue
- reputational damage
- compliance issues
In some cases, recovery takes days. In others, weeks and the real impact often goes beyond the initial incident.
This is why cyber risk increasingly sits alongside financial and operational risk – not separate from it.
The role of insurance brokers (and where things get difficult)
Most SMEs rely on insurance brokers when making decisions about cyber cover.
That’s not surprising.
Brokers are trusted advisors.
But cyber insurance introduces challenges that don’t exist in more traditional policies:
- technical requirements (MFA, patching, backups)
- reliance on client-provided information
- varying insurer expectations
- and clients who believe everything is already “handled by IT”
This creates a difficult position:
The broker is expected to advise… but the detail sits elsewhere.
The reality behind “We’ve got IT support”
One of the most common responses businesses give is:
“Our IT company handles all that.”
Sometimes that’s true.
Sometimes it’s partially true.
And sometimes there are gaps that only become visible when:
- a renewal question is asked
- a proposal form needs completing
- or an incident happens
Common areas where this shows up:
- Multi-Factor Authentication not fully enforced
- Backups in place but not tested
- Email security missing key protections
- Devices not consistently patched
- No clear visibility of what’s actually monitored
None of this is unusual. But it matters when the detail is needed.
Where the biggest gaps appear
The challenge isn’t just insurance — it’s what sits behind it. These figures highlight where many businesses are most exposed.
What insurers are increasingly looking for
Across the market, expectations are becoming more consistent.
Insurers are typically looking for evidence of:
- Multi-Factor Authentication (MFA)
- Endpoint protection and monitoring
- Patch and vulnerability management
- Backup and recovery capability
- Email security and phishing protection
- Security awareness
Not as theory – but as something that is actually in place and increasingly, something that can be demonstrated if needed.
The cost conversation (and where it often goes wrong)
Cost is often cited as a barrier to cyber insurance.
But the comparison is rarely straightforward.
Because the alternative is not “no cost”.
It’s:
- downtime
- recovery effort
- lost revenue
- and disruption to the business
The challenge is that these costs are only fully understood after something happens.
Where businesses get stuck
Most businesses don’t ignore cyber risk.
They get stuck between:
- “we think we’re covered”
- and
- “we’re not sure what’s actually in place”
That uncertainty is what leads to:
- hesitation around insurance
- difficulty answering proposal questions
- and exposure that isn’t fully understood
Bridging the gap between cyber security and insurance
This is where a more joined-up approach helps.
Instead of treating cyber security and insurance as separate conversations, they need to align.
That means:
- understanding what controls are actually in place
- identifying gaps before they become an issue
- and making decisions based on evidence, not assumptions
For brokers, accountants and advisors, this makes conversations clearer.
For businesses, it removes uncertainty.
Where Black Swan fits
At Black Swan Cyber Security Solutions, we work with:
- businesses
- insurance brokers
- accountants and financial advisors
…to help bridge this gap.
We focus on:
- what’s actually in place
- what insurers are likely to expect
- and where attention is needed (if at all)
No jargon-heavy reports. No unnecessary complexity. Just clarity.
A simple starting point
Cyber Risk & Insurance Readiness Check
A practical way for businesses to understand where they stand.
- Quick and non-disruptive
- Plain-English findings
- Clear summary of key areas
- Practical next steps
- No obligation
For many organisations, it’s enough to confirm things are in good shape. For others, it highlights areas worth addressing early.
What this means for businesses in Chesterfield, Sheffield and Derbyshire
We’re seeing the same patterns locally as the national data suggests:
- growing awareness
- increasing insurer expectations
- and uncertainty around what’s actually covered
For small and medium-sized businesses, this is becoming part of normal business risk – not something separate.
The earlier that gap is addressed, the easier everything becomes:
- renewals
- compliance
- and day-to-day confidence
Cyber risk isn’t new. Cyber insurance isn’t new.
But the gap between the two is still widely misunderstood.
Closing that gap doesn’t require over-complication. It just requires clarity.
Let’s talk
If you’d like a clearer view of where your business stands, or want to support your clients with this, we’re always happy to have a conversation.
We support businesses across Chesterfield, Sheffield and Derbyshire with practical, no-nonsense cyber security that aligns with real-world risk.
Backed by the world's leading cyber defenders
Meet Kevin: Founder & lead security consultant
Kevin has spent over 20 years solving real-world IT and cyber security challenges for organisations like yours. His approach is refreshingly straightforward: listen first, understand your constraints, then build security that actually works within your budget and compliance requirements.
Beyond technical expertise, Kevin brings a deep understanding of how organisations really operate, gained through years serving as a Parish Councillor, school governor, and charity trustee. He knows what it’s like to balance competing priorities, stretch budgets, and maintain public trust.
Whether you’re dealing with a security incident or simply want an honest assessment of your current protection, Kevin provides clear guidance without the sales pitch.
Ready to discuss your security needs?
Contact Kevin directly – no lengthy sales process, just practical advice from someone who genuinely wants to help.
Meet Kevin: Founder of Black Swan
Concerned about cyber security? Need advice or a tailor-made quote? Kevin is here to help you!
From actionable advice to helping you to see where you could be at risk, Kevin will help you to get your business on a path that is secure-by-design and ready for the unthinkable.
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