Many small and medium-sized businesses are still on the fence about the cost and benefits of cyber insurance, but for those companies who are taking the leap, the process is drastically improving their security discipline. The growing concern over cybersecurity over the past few years has convinced over 25% of small and medium-sized businesses (SMBs) to add cyber insurance to their security portfolio. The cost of a ransomware incident, production loss, and public reputation are contributing factors to SMBs turning to cyber insurance. However, about 58% of businesses still question the cost/benefit value of the service.
Security professionals, however, are seeing an unexpected benefit of the cyber insurance wave; businesses have to increase their level of security and security practices to be approved for insurance. Cyber insurance companies have been hit hard over the past few years with the increase of ransomware; the average cost of a compromise was $9.4 million in 2022. Insurance companies quickly discovered many SMBs were using outdated security controls that were easily compromised. The result is much higher standards in order to qualify for insurance in 2023. Companies must demonstrate a high level of layered security through extensive documentation and agree to maintain that level of security to keep coverage.
What this means for SMBs who seek cyber insurance is they have a much greater defense against cyber threats by participating in the auditing process. Then, if a cyber event does occur, they have insurance coverage to fall back on. Many small businesses do not have the internal resources capable of completing the cyber insurance process, so they consult with an MSPs like Quanexus. The Quanexus Q-stack is an example of the kind of layered security insurance companies are looking for a small business to demonstrate. If your business is ready to join the 25% and explore cyber insurance, please reach out to us and see if we are a good fit for your needs.
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