Startups streamlining cyber cover: Embroker

Startup companies appear to be “streamlining” their cyber insurance coverages, according to a report Tuesday from digital insurance broker Embroker Inc.

Almost half of respondents, or 48%, “simply added cyber onto their existing insurance packages this year,” compared with just 22% in 2023, said the 2024 Cyber Risk Index: Startup Edition from Embroker.

Only 7% of startups chose to take on the most comprehensive coverage in 2024, down substantially from 27% in 2023.

Overall penetration, however, is growing, albeit slowly. In 2024, 93% of startups reported having cyber insurance, up from 90% in 2023 and 86% in 2022.

Cyber incident rates are also growing. Just over four-fifths, or 81%, of venture capital-backed founders have experienced a cyberattack in their career, up from 78% in 2023 and 67% in 2022, report data showed.

Respondents also indicated that having cyber insurance has eased their funding efforts, provided additional services to respond to a cyberattack, and helped meet the requirements and needs of customers and vendors.

“Founders aren’t just using cyber insurance as a safeguard but as a strategic lever to gain investor confidence and market credibility,” Andy Lea, chief insurance officer at Embroker, said in a statement.