CFC has launched a new extension to its flagship Cyber Proactive Response policy, designed to provide enhanced protection for small and medium enterprises facing financial losses linked to cyber-related supply chain disruption. The extension addresses contingent business interruption, such as loss of income resulting from a major customer cancelling orders following a cyber attack.
The new customer business interruption cover responds to a growing exposure for SMEs that depend on a limited number of key customers. By extending protection beyond direct cyber incidents, the offering is intended to help businesses manage the financial impact of disruptions caused by cyber attacks elsewhere in the supply chain.
Scott Bailey, Head of Global Cyber Underwriting at CFC, said recent high-profile incidents have highlighted vulnerabilities across interconnected supply chains. “The cyber attack suffered by Jaguar Land Rover demonstrated acute vulnerability in the supply chain because of dependence on one major customer whose business has effectively been shut down by cyber criminals.
“Whilst unable to operate its own business as normal during the attack and recovery period, JLR was forced to cancel orders with its hundreds of suppliers, decimating the short-term fortunes of many of its small business providers.”
Bailey noted that cyber insurers have historically supported policyholders directly affected by cyber attacks or supplier-side incidents. “Over the past 25 years, cyber insurers have a demonstrable track record of covering policyholders whose businesses have been directly hit by a cyber attack or caught up in the fallout of an attack impacting their suppliers.
“However, we haven’t fully addressed the exposure faced by small businesses of a customer falling victim to a cyber attack and impacting the supply chain like this – until now. Our groundbreaking customer business interruption extension fills that protection gap.”
The extension is available globally by endorsement on CFC’s Cyber Proactive Response policy for SMEs. It is designed to support brokers in offering coverage to businesses that derive a material proportion of revenue from a single customer, providing an additional layer of resilience against cyber-driven disruption.
While particularly relevant to sectors with pronounced supply chain exposure, such as manufacturing and wholesale or distribution, the customer business interruption coverage is available across all industries and geographic regions.
Bailey said the launch reflects CFC’s commitment to responding to emerging cyber risks. “We’re incredibly proud to have stepped up and delivered a solution to this real world need. At CFC, we passionately believe that cyber insurers must respond rapidly to evolving risks. Given the significant number of SMEs still without cyber protection and the ever increasing threat posed by cyber criminals, our sector of the insurance industry has a vital role to play in helping build economic resilience and protect livelihoods.”
CFC is also continuing its long-standing partnership with The British Insurance Brokers’ Association, having served as BIBA’s dedicated cyber insurance scheme provider since 2004. Through this collaboration, the customer business interruption endorsement is being delivered to BIBA members across the UK.
