The landscape of cybersecurity is shifting rapidly, making cyber insurance a critical safeguard for startups. According to Embroker’s 2024 Cyber Risk Index: Startup Edition, 93% of startups now carry cyber insurance, a significant increase from 86% just two years ago. This trend reflects growing concerns over cyberattacks, with 81% of startup founders having faced a cyberattack in their career—up from 67% in 2022.
Why Cyber Insurance Matters for Startups
Startups face mounting pressures from investors, boards, and clients to maintain cyber coverage. In fact, 41% of founders say cyber insurance has helped them secure funding, underscoring its role beyond protection. As Andy Lea, Embroker’s chief insurance officer, explains, “Cyber insurance is becoming more important, not just for protection but as a business enabler, given the prominence of cyber breaches in the news.”
Factors Driving Cyber Coverage Adoption
Several elements are pushing startups toward cyber insurance:
- Foreign relations tensions (31%)
- Rising ransomware attacks (27%)
- Challenges of managing a hybrid workforce (29%)
Moreover, 87% of startups are planning new cyber protection measures for 2025, while nine in 10 have a dedicated cybersecurity team or vendor.
Confidence in Coverage
Interestingly, while only 7% of startups opted for the most comprehensive cyber insurance in 2024, most founders remain optimistic about their policies. A substantial 66% believe their current coverage fully addresses their risk, up significantly from 30% in 2022.
As cyber threats evolve, startups are increasingly prioritizing insurance as part of their resilience strategy, reflecting a broader industry shift toward proactive risk management.
