Why business insurance needs to catch up with millennials
Updated 7th October 2016
There's never been a more exciting time to start a business in the UK. Over 600,000 new businesses were started last year, up 4.6% on the year before, as more and more entrepreneurs decide to take the plunge. And while starting a business is always a challenge, in many ways it's never been easier, with technology and co-working spaces reducing overheads and many of the barriers to entry. Barely a day goes by when I don't hear another story of somebody innovating and disrupting, to improve what's gone before.
But despite these great strides forward in the business landscape, the insurance industry has been characteristically slow to respond, leaving many start-up and growing businesses, particularly those in the innovative tech space, woefully short of options.
Furthermore, as the nature of business has changed so has the nature of the risks they face, with issues such as cyber-attacks and data breaches replacing fires, thefts and floods as the biggest concerns. Recent Government research found that a third of small businesses and half of medium-sized businesses were hit by a cyber-attack or data breach last year, yet insurers have been slow to provide the kind of specialist policies that protect against these threats. The same survey found that only 37% of firms currently have cyber insurance, meaning that a significant number could face a hefty bill in the event of an attack.
With attacks and breaches becoming more sophisticated and evolving all the time, it's crucial for the industry to provide specialist products that sufficiently cover for all the eventualities. There is also the new Data Protection legislation to consider - coming into force in 2018 - which means the potential impacts will become even greater. The new rules will give customers greater powers to take legal action in the case of a breach, while fines are set to increase to as much as €20m, meaning the right insurance will be paramount.
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