Ever hear of the “cyber insurance poverty loop”? It’s a growing problem that puts small to midsize enterprises (SMEs) at risk.
Many SMEs lack the resources to harden their IT environments. This makes them more vulnerable to cyber threats, which makes them less attractive to insurers. At the same time, SMEs often assume that they’re less likely to suffer a cyberattack because they’re small. They don’t invest in the expertise and tools needed to obtain good cyber insurance coverage at an affordable rate.
However, attackers increasingly target SMEs because they lack strong security controls. That leaves SMEs vulnerable to a potentially devastating cyberattack without insurance to help offset the cost.
Breaking out of this loop starts with understanding the risks involved, changes in the cyber insurance marketplace and cost-efficient ways to close security gaps. A managed security services provider (MSSP) can help.
Why SMEs Are Vulnerable to Cyberattack
Experts say that most attacks targeting SMEs involve phishing and business email compromise (BEC). Phishing attacks are becoming more sophisticated, with criminals using AI to generate deceptive emails that are difficult for users to detect. They are also targeting their campaigns at executives and individuals in the organization who have access to money and sensitive data. The attacks often escalate into ransomware, corporate espionage or financial fraud.
Third-party threats are a growing problem. SMEs often fall victim to attacks that originate somewhere along the supply chain. If an SME bears responsibility for a breach that impacts another organization’s operations, it could result in billions of dollars in losses that wipe out the SME.
Many SMEs have vulnerabilities in their IT environment that leave them open to these kinds of attacks, and lack the tools to detect and mitigate attacks when they occur. Weak passwords, outdated software and unpatched vulnerabilities increase the risk.
The Changing Cyber Insurance Marketplace
SMEs that considered cyber insurance several years ago may have found high premiums and limited coverage, but the marketplace has changed significantly. The cyber insurance market is set to double by 2030, and that expansion has decreased costs despite growing cyber threats. Many organizations are pleasantly surprised by lower premiums and higher limits when they renew their policies.
To reduce their exposure, cyber insurance carriers are offering services such as training and risk assessments. They’re also amending policies to address third-party threats and AI-driven attacks, although coverage gaps remain with regard to AI.
Despite offering more affordable coverage options, cyber insurance carriers still have a rigorous underwriting process. They expect organizations to provide detailed information about their security measures and cyber risk management plans. They also want to see documented plans outlining how the applicant would respond to a cyber incident.
The Value of Partnering with an MSSP
A qualified MSSP can help SMEs improve their security posture and obtain cyber insurance. The MSSP will assess the organization’s IT environment to identify security gaps and outdated equipment and software. The MSSP can then recommend upgrades and investments that will not only boost security but improve overall performance and availability.
Once the foundation is in place, the MSSP will monitor and manage the environment to detect threats and address potential problems. Many MSSPs offer robust security tools “as a service,” eliminating the need to buy hardware and software. This integrated security suite, monitored and managed by experts, provides end-to-end protection against threats.
Qualified MSSPs can also recommend cyber insurance carriers and assist with the documentation process. Because the MSSP’s team is familiar with the SME’s environment, they can provide all the information needed to obtain a reasonable quote.
How Verteks Can Help
Verteks delivers enterprise-class security services that are affordable and designed to address each organization’s specific requirements. We have also helped organizations of all sizes obtain cost-effective cyber insurance coverage.
Don’t assume your organization is too small to be the target of a cyberattack, or that cyber insurance is out of reach. Contact us to learn how we can help you reduce the risk of a potentially devastating cyberattack.
