Cyber insurance for UK SMEs: why it matters more than ever

Cyber attacks are no longer a distant risk – they’re an everyday reality for businesses of all sizes. In 2025 alone, cyber incidents have disrupted Jaguar Land Rover, Marks & Spencer, Co-op, and major UK airports. These high-profile cases show that even companies with strong defences can be paralysed.

For SMEs in the UK, the risks are even greater. Attackers know that smaller businesses often lack sophisticated cyber security, making them easier targets. All the while, attacks on SMEs increase in both scale and sophistication. The financial, operational, and reputational fallout from a cyber attack can be devastating. That’s why cyber insurance is now essential.

As an SME business, you don’t even need to be attacked directly to suffer a loss. A “worm” style virus can infiltrate your system via supplier websites or even government portals.

• Jaguar Land Rover: a cyberattack forced production halts across multiple plants, with operations suspended for weeks.
• Marks & Spencer & Co-op: both faced system disruptions and data issues following targeted breaches. These attacks were orchestrated by 4 teenagers.
• UK airports: Heathrow and others experienced major check-in delays after software supplier Collins Aerospace was compromised.

These incidents highlight that cyber risks can cause not just data leaks, but supply chain breakdowns, significant lost revenue, and reputational harm.

For instance, losses from JLR’s global shutdown of production are expected to run into the hundreds of millions of pounds. And the company could be forced to foot the bill for the hack, as they had reportedly failed to finalise their cyber insurance policy before the attack took place. 1

Similarly, Co-op did not have dedicated cyber insurance and will therefore have to bear the brunt of the reported £206m loss of revenue costs of the attack. 2

Many SMEs still believe cyber attacks only affect large corporations. The truth is:

• SMEs are more vulnerable because they tend to have fewer defences.
• Research suggests that the uptake of cyber insurance amongst SMEs is still relatively low: a UK Government report found that 35% of SMEs they surveyed had no cyber insurance. 3
• Cyber criminals often use automated attacks that scan for weak points, meaning size doesn’t matter – any business can be hit.

If you hold client data, that data has an intrinsic value on the dark web. If you had £100,000 of cash, you’d protect it. Your client data is just as valuable to hackers.

Cyber liability insurance helps protect your business against the full spectrum of cyber risks:

• Data breaches & privacy violations: covers investigation, legal fees, customer notifications, and regulatory fines (where insurable).
• Business interruption: reimburses lost income and extra expenses while systems are down.
• Cyber extortion & ransomware: covers ransom negotiations, payments (where legal), and recovery costs.
• Liability claims: protection if clients, customers, or partners sue for data loss or breaches.
• System & data recovery: pays for restoring IT systems, software, and data after an attack.
• Crisis management: PR and communications support to protect your reputation.

Think of cyber insurance not just as a cost, but as a business safeguard:

• Avoids massive losses: a single breach can cost six figures in legal, technical, and reputational damage.
• Accelerates recovery: access to specialist forensics, legal teams, and PR experts speeds up incident response.
• Boosts resilience: policies often include preventive support like training and security audits.
• Strengthens credibility: many clients and suppliers prefer or require insured partners.

For SMEs, the return on investment comes from avoided downtime, reduced risk exposure, and greater business confidence.

A company’s cyber insurance needs can vary greatly depending on the size of your business and the industry you’re in. As such, policy type and coverage options can be equally varied and complicated. Complex policy language and a lack of clear, accessible guidance impede SMEs from taking out cyber insurance.

A recent UK Government report revealed that almost a quarter of SMEs they surveyed about their cyber insurance said that they purchased an insurance policy without being fully aware of all their options. We believe it’s imperative that any business acquires coverage with a clear grasp of all the available options.

The same report also found that SMEs often overestimate their ability to self-insure, which can contribute to a disconnect between risk recognition and the implementation of effective safeguards.

At WillU, we don’t believe in one-size-fits-all. We broker cyber insurance policies tailored to your business – covering today’s risks while scaling as you grow.

• Custom coverage for ransomware, business interruption, third-party liability and more.
• Expert risk assessment to identify gaps and ensure the right protections.
• Forward-looking policies that grow with your business.
• Preventive support, including access to training and security resources.

Clear, transparent terms so you know exactly what you’re covered for.

Cyber attacks on giants like JLR, M&S, Co-op, and UK airports prove one thing: no business is safe. For SMEs, the stakes are higher because a single attack can be devastating to their business.

With cyber insurance, you gain the financial protection, operational resilience, and peace of mind to withstand today’s evolving threats.

Pairing this operational resilience with sage broker advice and clear communication can demystify cyber risk and highlight the strategic benefits of comprehensive coverage.

WillU helps UK SMEs secure tailored cyber liability insurance – protecting where you are today, and where you’ll be tomorrow.