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By Joanna Evans, Head of Bikmo for Business

This one’s sobering: 42% of small businesses reported a cyber breach in 2024, according to the National Cyber Security Centre. And it’s not just massive corporations being targeted. It’s small, lower-turnover businesses, too.

Why? Because hackers know that smaller businesses often have weaker security and less awareness of cyber risks. They’re easier targets with just as much to lose.

What Cyber Insurance Actually Covers

Cyber insurance offers comprehensive cover for stolen funds and fraudulent transactions, ransomware attacks, data breaches, customer information theft, business interruption from cyber incidents, and legal costs and regulatory fines.

Increasingly, policies come with free security tools and proactive incident response support. It’s not just about picking up the pieces after an attack. It’s about prevention.

The Numbers Tell the Story

Policyholders have 73% fewer claims than the industry average. Insurers estimate there were £317 million in losses from businesses that didn’t follow guidance provided at the quote stage.

Here’s an interesting one: 52% of first-party claims were the result of third-party breaches. No fault of the actual insured. You can do everything right and still be vulnerable because of your suppliers, payment processors, or other connected systems.

The average claim severity for businesses with revenues under £25 million was around £80,000. That represents a significant financial risk for most independent bike shops.

The good news? 56% of all claims were resolved without the business owner having to pay anything out of pocket.

Even better, just getting a quote from the right insurer can get you a free risk assessment showing all your vulnerabilities.

What Are the Real Threats?

Ransomware: Your systems are locked, and criminals demand payment to unlock them.

Payment Fraud: Criminals intercept payment details or trick you into transferring money to fraudulent accounts.

Data Breaches: Customer information is stolen, leading to GDPR fines, legal costs, and reputational damage.

Business Email Compromise: Hackers access your email and impersonate you or your suppliers.

System Downtime: Cyber attacks can shut down your operations during peak trading periods.

Why Bike Shops Are Targets

You process card payments daily. You hold customer data. You use online banking. You rely on computer systems for inventory, orders, and accounting. And crucially, you probably don’t have dedicated IT security staff. That makes you an easier target than larger businesses with security teams.

What Good Cyber Insurance Looks Like

Your policy should include financial loss cover for stolen funds and fraudulent transactions, business interruption cover for lost income, data breach response for legal costs and potential GDPR fines, incident response support from specialists, prevention tools including security software and employee training, and third-party liability if your systems are used to attack others.

Simple Steps to Reduce Your Risk

While insurance is essential, prevention is better. Use strong, unique passwords for every system. Enable two-factor authentication on all accounts, especially banking and email. Keep software updated. Train your team on security basics. Back up your data regularly and keep backups offline or in secure cloud storage. Be suspicious of unexpected emails requesting payments or login details.

What to Check in Your Policy

When reviewing cyber insurance, ask: What’s the claims limit? Is incident response included? Do you get access to security tools? What happens if you’re breached through a third party? Are you getting a vulnerability assessment?

Don’t Wait Until It’s Too Late

The worst time to discover you need cyber insurance is when you’re locked out of your systems during peak season or facing GDPR fines after a data breach.

Cyber threats are getting more sophisticated, and small businesses are increasingly targeted. The question isn’t whether you’ll be attacked, but whether you’ll be protected when it happens.

Want to know more? Visit the Bikmo x ACT site, or you can speak to Bikmo directly at forbusiness@bikmo.com.

ACT Gold Members save 10% on bike shop insurance.

Looking for more specialist insurance information and support for cycling businesses on retail insurance? Check out the insurance articles on BikeBiz.