A growing cyber insurance protection gap is affecting small businesses. A recent report by CyberCube outlines a growing gap in cyber insurance coverage that leaves small businesses exposed to increasing threats.
This shortfall calls for coordinated action by brokers, underwriters, and reinsurers to improve protection for companies earning between $10 mn and $250 mn annually.
These businesses contribute significantly to global economic output but receive limited attention from the cyber re/insurance market. The result is a large segment operating without adequate protection against cyber incidents.
Coveware data shows that 75% of ransomware attacks affect companies with 11 to 1,000 employees. The absence of advanced security systems in smaller operations increases the likelihood of attackers breaching multiple entities in a single campaign.
William Altman, Director of Cyber Threat Intelligence Services at CyberCube, noted that this coverage gap presents both a market opportunity and an industry obligation.
Brokers can influence uptake by helping business owners understand the importance of cyber coverage, while re/insurers can improve market reach and help reduce systemic risk.
Brokers play a crucial role in driving adoption among small businesses, helping them recognise the value of cyber coverage. For (re)insurers, expanding to small enterprises not only broadens market reach and enhances portfolio diversification but also strengthens economic resilience.
William Altman, Director of Cyber Threat Intelligence Services at CyberCube
“When small businesses effectively prevent and recover from attacks, they protect jobs, sustain supply chains, and support their communities”, William Altman says.
CyberCube’s report recommends that brokers focus on expanding cyber policy adoption. This includes encouraging generalist brokers to invest more time in cyber sales, improving client engagement around cyber risk, and offering pre-policy risk assessments to ensure adequate protection.
Underwriters can refine risk selection and pricing models to suit small-business needs. Developing scalable practices and supporting better policy design in collaboration with brokers will make cyber coverage more practical and accessible.
Reinsurers also carry responsibility for maintaining market capacity. They can strengthen underwriting approaches specific to small-business portfolios, separating these strategies from those used for large enterprises to ensure appropriate risk management across segments.
The report also points to the increasing role of AI in helping threat actors identify weaknesses more efficiently. This raises the level of exposure for small and mid-sized businesses and highlights the need for re/insurers to stay updated on evolving methods used by attackers.
CyberCube concludes that industry action can lead to a more stable cyber insurance market. Strengthening protections for small businesses supports broader economic stability, protects jobs, and reduces the ripple effects of cyber incidents throughout supply chains and local communities.
