Embroker’s 2023 Cyber Risk Index Report is here.
Prioritizing is one of the hardest things any business owner has to do. But, especially for startups, juggling future risk with today’s financials and day-to-day work is incredibly difficult. Building a business from the ground up is a difficult and, unfortunately, vulnerable process. With new risks emerging daily, it’s hard to know which to tackle first. Cybersecurity remains one of the biggest for businesses, but many haven’t seen cyber protections as necessary for running their business. Until now.
Outside influences like boards and investors and emerging risks like AI have forced founders to invest in coverage to protect their business, regardless of their personal view of the risks. Founders are realizing there’s no such thing as too much insurance, especially when it comes to protecting themselves from cyber threats.
How do we know? We surveyed VC-backed startup founders to uncover their opinions on cybersecurity and what influences their decisions when choosing cyber coverage for their businesses. Reflecting on last year’s findings, it’s clear founders are more aware of their risks and are prepared to combat them with cyber insurance policies.
Some of the key findings from this year’s report include:
- Boards and investors are prioritizing cybersecurity. They are looking to invest in startups with robust cyber protections in place. The volume of founders reporting frequent cybersecurity conversations with their investors has more than doubled, from 41% in 2022 to 83% in 2023. But investors aren’t the only ones looking for covered companies: the rate of customers requiring it for their contracts quadrupled in 2023 to 48%.
- Early-stage founders are most likely to take risks on their coverage. But as SEC guidelines come into play and stakeholders focus more on cybersecurity, later-stage founders cannot be as risky and are more likely to protect themselves with the most comprehensive plans.
- Cyber insurance is no longer optional. Founders ranked cyber attacks as the leading factor that can most impact their business in the coming year. An overwhelming majority of founders are protected against cyber damages: 90% report having cyber insurance. Founder’s confidence in their policies increased year-over-year, with 55% believing their current coverage will cover them in the event of a breach.
- Founders are wary of AI, but it’s not their top concern. They’re feeling the heat of environmental policy, with many concerned over their responsibility for environmental issues. And while AI isn’t their top concern, it is their top priority. Nine out of 10 founders believe it’s a threat to their business going forward. But just like their confidence in their cyber policies, 76% of founders believe they have the means in place to combat or recover from malicious AI.
Regardless of what stage founders find themselves in, they’re confident in their coverage, and are looking to add more in the future. Startups know that in today’s tough environment, cybersecurity protections for their business are a necessity. The Annual Cyber Risk Index report serves as a valuable resource, providing startup founders with insights to navigate emerging cybersecurity risks.
Read the full press release here.
To check out the full report, visit https://www.embroker.com/insurance-index/cyber-risk-index-report/
Are you prepared for cyber risks?
Read our 2023 Cyber Risk Index Report to find out what businesses are worried about, how they’re protecting themselves, and what the future holds.