Do Small Businesses Really Need Cyber Insurance?

In today’s digital-first world, even small businesses face big cyber risks. As your trusted independent insurance partner, we at Haughn Insurance often hear the same question: “Is cyber insurance really worth it for a small business like mine?”
The simple answer: yes — and here’s why.

1. Cyber Risk Isn’t Just a Big-Business Problem

Many owners assume hackers only go after large corporations. Unfortunately, that’s no longer the case. Small and medium-sized businesses (SMBs) are increasingly targeted because they often lack the cybersecurity defenses of larger companies.

Recent data shows:

  • Small businesses experience a median of four cyberattacks per year.

  • About 42% of small businesses were targeted in the last year.

  • Nearly half of all global cyber exposure stems from small and mid-size organizations.

Cybercriminals don’t discriminate — they look for opportunity.

2. The Cost of a Cyber Event Can Be Devastating

Recovering from a cyber incident goes far beyond fixing a server or resetting a password. Businesses face:

  • Legal and regulatory costs

  • Notification and credit-monitoring requirements

  • System recovery

  • Ransom demands

  • Business interruption

  • Reputation damage

Even though some studies show the median cost per attack around $8,300, other reports show financial losses that can easily stretch into the tens or hundreds of thousands — an amount that can severely strain a small business or shut it down altogether.

3. Most Small Businesses Are Still Underprepared

Despite rising threats:

  • 64% of small businesses don’t understand what cyber insurance covers.

  • Only 17% currently carry a cyber policy.

  • Many only consider coverage after experiencing an attack.

Like any other protection — property, liability, auto — cyber insurance is something you want in place before trouble hits.

4. Cyber Insurance Does Much More Than Cover Ransomware

A well-designed cyber policy from Haughn Insurance provides support far beyond the headlines. Coverage can include:

  • Incident response and digital forensics

  • Legal counsel

  • Public relations and reputation management

  • Customer notification requirements

  • Business interruption coverage

  • Data restoration

  • Cyber extortion (including ransomware)

This protection helps ensure your business can recover quickly and confidently.

5. Insurance + Good Cyber Habits = Real Protection

Cyber insurance is one piece of a larger strategy. Strong risk management helps prevent incidents and keeps premiums lower.

Priorities include:

  • Multi-factor authentication

  • Strong passwords and access controls

  • Regular backups

  • Employee training

  • Updated software and hardware

  • A documented incident response plan

At Haughn Insurance, we help small businesses combine smart prevention with the right coverage for a stronger overall defense.

6. Is Cyber Insurance Right for Your Small Business?

Ask yourself:

  • Do you store customer or employee information?

  • Do you accept credit card payments?

  • Would a temporary shutdown hurt your revenue or reputation?

  • Do you have a plan for responding to a cyber event?

If you answered yes to any of these — or if you’re unsure — cyber insurance is worth a serious look.

The Bottom Line

Yes — small businesses absolutely need cyber insurance.
Not because it’s a trend, but because cyber threats are real, costly, and continuing to grow. Cyber coverage helps protect your operations, your reputation, and your future.

If you’d like to explore whether cyber insurance is right for your business, the team at Haughn Insurance is here to help. We’ll walk you through your risks, your options, and the coverage that makes the most sense for you.