More than half of US SMEs have experienced a cyber attack in the past year, but only 14% feel prepared for such events, according to an Insurance Information Institute white paper.

The paper says insurers are addressing the threat of cyber attacks and data breaches through innovative products, risk management techniques and employee training.

“Insurers foresee substantial growth coming from the [SME] segment as these companies become aware of the possibilities of liability, especially a breach and resulting response costs arising out of the possession of private data,” institute CEO Sean Kevelighan said.

Most cyber-insurance claims involve the loss, exposure or misuse of sensitive personal data.

US insurers collected $US1.35 billion ($1.76 billion) in premium written for cyber insurance last year.

“Creating an affordable product that SMEs will be willing to buy is a key component in the insurance offering,” the white paper says. “Since different industry sectors represent different levels of exposure, pricing will vary depending on the type of SME.”