A recent reported by InsurTech firm Embroker has found up to 63% of small and medium sized firm owners believe they are not at risk from a ransomware attack.
According to Carrier Management, Embroker stated that business owners – even many tech startups – remain vastly overconfident about both their risk for ransomware attacks and insurance they have in place to prevent them.
The report – titled Big Risks for Small Businesses – is based on a survey over 500 business owners, CEOs and tech startup founders from August this year.
The report found that alongside the 63% thinking they weren’t vulnerable to a ransomware attack, only 28% of SME owners said they had cyber insurance policies to address potential problems. A further 22% said they had read and understood all of their policies, with up to half saying they are relying on their brokers to sign up for coverage.
Some of the other key findings were that respondents said that reputational harm to the company or brand or product/equipment malfunction was a top risk. A further 37% labelled labour shortages and overworked employees as a risk, alongside customer retention/growth, generating demand and managing costs as other risks.
Meanwhile, 46% of business owners and 57% of tech founders said they didn’t have enough coverage if a ransomware attack was to occur, while 58% of tech founders said they believed they would probably face risks from a ransomware attack at some point. Only 34% of this same group said they cyber policies.
Up to half of respondents said they relied on broker expertise to sign up for coverage, with 25% of them stating they relied on the brokers to fully research and price out options. In addition, one in five said they didn’t know how their insurance purchases are handled.
Embroker CEO Matt Miller said, “While many SME owners and startup founders have been experiencing strong growth and financial backing in the past year, modern day risks including cyber-attacks, supply and remote workforce issues can stop progress in its trac. Business insurance is a critical element in a company’s growth strategy, allowing a company to effectively transfer risk and ensure that unforeseen events don’t impede their growth – it is not a decision and process you can go through on autopilot.”
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