Cybersecurity is a top concern for many venture capital-backed startups, according to commercial insurance platform provider Embroker’s Cyber Risk Index: Startup Edition 2022 report.
Key points of the report are:
- 31% of startup founders say they care more about cybersecurity than they did a year ago.
- 50% say they believe their business will be subject to cyberattacks.
- 68% say their business has been hit by a cyberattack.
- 86% have some form of cyber insurance protection in place. But even with these protections in place, 71% said he is considering adding additional cyber protections and tools in 2023.
Startup founders may be more likely to invest in cyber insurance or upgrade their cyber coverage in 2023, notes Embroker. Previously, Embroker reported that he saw a 50% increase in cyber policies purchased between Q1 and Q2 of 2022.
Embroker also said the increase coincided with increased news coverage of the war between Russia and Ukraine, and concerns about potential retaliatory cyberattacks from Russia against U.S. infrastructure and businesses. I pointed out that I did.
What motivates startups to buy cyber insurance?
According to Embroker’s report, pressure from investors and board members (49%) ranks as the top reason startups buy cyber insurance protection.
Other factors driving startups to buy cyber insurance include:
- Tensions over diplomatic relations (40%)
- Media coverage of other business data breaches (35%)
- Need to manage hybrid or remote workforce (32%)
Nearly 52% of startup founders who have cyber insurance say their coverage is “tailored to their needs” or the “most comprehensive” package, according to Embroker report . By comparison, about half of startups with cyber insurance indicate that their current policies only partially cover them in the event of a cyberattack or data breach.
Meanwhile, the Embroker report shows that cost (44%) is the top reason startups choose not to purchase cyber insurance. Still, a clear understanding of cyber insurance can help startups find insurance that fits their budget.
Top concerns for startup founders in 2023
According to a report by Embroker, startup founders cited inflation (32%), cyberattacks (27%) and supply chain challenges (26%) as their top concerns for 2023. Additionally, they cited product innovation (32%), cybersecurity protection (31%), and equipment upgrades (30%) as their top three “non-negotiable investment areas” for 2023.
Embroker chief insurance officer David Derigiotis said that going forward, start-ups and others will be “incentivized to invest in digital security and risk management strategies.”
Cyber insurance providers can help these companies limit the risk of cyberattacks and data breaches. These companies also partner with his MSSPs to provide security services and tools to meet emerging cyberthreats.
