Cork Press Release

Beyond Protection: The Rising Tide of Cyber Warranties in the Growing Threat Landscape

In today’s interconnected digital world, small and medium-sized businesses (SMBs) increasingly embrace technology to drive growth and efficiency. Unfortunately, they also face many cybersecurity risks that can have devastating consequences.

According to CrowdStrike, adversaries are growing in number and speed. In 2023, it identified 34 new adversaries, bringing the total to 232. And we’re not talking about your everyday hacker or social media scammer. These sophisticated and well-organized groups such as Scattered Spider, LockBit, ALPHV, Clop, and BianLian.

And with the help of generative AI, these adversaries are using new techniques to break in faster by leveraging tactics such as phishing, social engineering, buying legitimate credentials from access brokers, SIM-swapping, MFA bypass, and using stolen API keys to gain initial access.

In addition, ransomware attacks are once again on the rise, along with increasing ransom demands. SMBs, which typically operate with limited resources, are a particular target and face unique challenges in securing their digital assets.

As cybercriminals continue to exploit vulnerabilities, it has become crucial for SMBs to adopt proactive approaches to protecting their sensitive information, maintaining customer trust, and safeguarding their overall business continuity.

Why focus on cyber warranties?

As increased ransomware attacks and online commerce drove demand for coverage, cyber insurance premiums surged to 51% in 2022. Premiums collected from insurers’ policies reached $7.2 billion and tripled in the past three years.

When it comes to cyber insurance, SMBs are often the forgotten victims as this sector has historically had trouble affording or even qualifying for cyber insurance.

Small-to-medium-sized businesses account for over 43% of the United States’ GDP and employ half of the American workforce (per the U.S. Chamber of Commerce). Given the urgent need for additional cybersecurity measures that complement cyber insurance, cyber warranties are quickly becoming a pivotal tool for fortifying SMBs’ resilience against ever-evolving cyber threats.

Cork Cyber Protection from the Inside Out

Cork is a purpose-built cyber warranty company for managed service providers (MSPs) serving small businesses (SMBs) and the software solutions they manage. Its purpose-built platform with AI-enhanced cyber risk engine is designed to offer MSPs and their client’s peace of mind with near-instant coverage and settlements in the aftermath of security incidents. Cork’s revolutionary Protection from the Inside Out™ approach to actionable insights, flexible premiums and claims management puts control in the hands of MSPs and SMBs to protect the digital assets they value most.

Cork’s cyber warranty is built for MSPs and uses real-time telemetry to provide instant coverage. The warranty is backed by FutureSafe’s Heimdal security solutions, which help protect businesses from cyber security challenges.

What is a Cyber Warranty?

A cyber warranty is a comprehensive and forward-thinking solution that goes beyond traditional cybersecurity practices. Much like a warranty for physical products, a cyber warranty assures SMBs that their digital infrastructure is fortified against cyber threats and gives customers financial protection by covering costs related to data recovery, business interruption, and incident response in the event of ransomware or business email compromise (BEC) incident.

By integrating cyber warranties into their cybersecurity frameworks and exploring the benefits, challenges, and best practices of this innovative approach, SMBs can implement robust cybersecurity measures and explore creative solutions that offer a safety net during a cyber incident.

Cybersecurity Concerns in a Rapidly Evolving Landscape

Cybersecurity is no longer just a buzzword; it’s a critical component of business resilience in today’s digital era. SMBs are increasingly becoming targets of cyber threats, which can have potentially devastating financial repercussions. In recent years, the frequency and sophistication of cyberattacks have escalated, posing significant risks to SMBs.

Accenture’s Cybercrime study reveals nearly 43% of cyber-attacks on small businesses. Only 14% of these accounted-for SMBs are prepared to face such an attack. 

The aftermath of a cybersecurity incident includes financial losses, damage to reputation, and operational disruptions. According to industry reports, a substantial number of SMBs do not recover from a severe cyber incident, leading to closure or long-term financial struggles.

Cost of a Breach

Status on the Impact of a Cybersecurity Incident on an SMB The financial toll of a data breach can be staggering. According to Accenture, SMBs spend between $826 and $653,587 on cybersecurity incidents.

Beyond immediate remediation costs, businesses face legal consequences, regulatory fines, and a decline in customer trust. The Ponemon Institute’s Cost of a Data Breach Report consistently highlights the rising financial impact, underlining the urgency for businesses to fortify their cybersecurity defenses.

Why SMBs Need the Combination of Financial Protection and Cybersecurity Technologies

As cyber threats evolve, traditional cybersecurity measures may not provide sufficient protection. SMBs need a holistic approach that combines cutting-edge cybersecurity technologies with financial and compliance protection mechanisms. This integrated strategy ensures prevention and swift recovery in the event of an incident. The need for such a comprehensive solution has paved the way for innovations like cyber warranties.

Cyber Warranty vs. Cyber Insurance

Understanding the distinction between cyber warranty and cyber insurance is crucial for businesses seeking comprehensive protection.

Cyber insurance provides extended coverage for the aftermath of a cyber event, encompassing expenses associated with restoring business operations. It is a reactive financial coverage that comes into play after an incident. While insurance is essential for covering damages, it lacks the proactive elements to prevent or mitigate an attack’s severity. On the other hand, cyber warranties offer assurances for specific components within a designated technology stack.

Think of it like a car warranty vs. car insurance. Cyber insurance, like auto insurance when there’s an auto accident, comes into play after an event to cover the cost of damages and repairs.

Conversely, a cyber warranty is akin to a car warranty where you have a contractual agreement provided by a manufacturer or, in some cases, a third-party warranty provider, offering assurances regarding the condition and performance of a vehicle for a specified period or mileage limit. Car warranties serve to protect consumers from unexpected repair costs by covering the expenses associated with certain repairs or parts replacements during the warranty period.

Cyber warranties are designed to offer a similar level of protection and are intricately linked to a set of technologies sold by an MSP, serving as a guarantee for the particular technology stack the customer has implemented. It’s crucial to note that cyber warranties are not a substitute for cyber insurance. Instead, they bridge the gap between proactive protection and reactive protection. 

Why is cyber insurance so challenging?

Obtaining and maintaining cyber insurance can be challenging for businesses due to several factors inherent in the complex and dynamic nature of the cybersecurity landscape. For one, the cybersecurity threat landscape continues to evolve at an unprecedented pace, with new and sophisticated threats emerging frequently. Insurers find it challenging to accurately assess and underwrite risks associated with rapidly evolving cyber risks.

In addition, estimating potential losses from a cyber incident is inherently complex. Unlike physical damages, the intangible nature of data breaches, business interruptions, and reputational harm makes it difficult for insurers to quantify potential losses accurately. These intangible losses result in significant financial losses, including costs for forensic investigations, legal fees, notification and credit monitoring services, and possible regulatory fines. These high costs make underwriting and pricing cyber insurance policies a complex task.

Finally, as data protection and privacy regulations become increasingly stringent, businesses must meet these requirements to qualify for cyber insurance. Navigating the complex web of regulatory compliance adds to the challenges businesses face with obtaining cyber insurance.

These concerns are why a cyber warranty should be an integral part of a comprehensive cybersecurity strategy due to its unique ability to provide proactive protection, financial assurance, and additional layers of defense against evolving cyber threats.

Determining if Cyber Warranty is Right for Your Business

As businesses navigate the complex cybersecurity landscape, investing in a cyber warranty requires careful consideration. There are some critical factors in determining whether a cyber warranty fits your business needs and risk tolerance.

Identifying Specific Cybersecurity Risks

Understanding your business’s unique cybersecurity risks is a critical first step in assessing the need for a cyber warranty. Conduct a comprehensive risk assessment to identify potential vulnerabilities, such as data breaches, system intrusions, and other cyber threats specific to your industry. Once any possible risks have been determined, a cyber warranty will act as a proactive shield against those risks by providing financial coverage and support in the event of a cybersecurity incident.

From data breaches to system disruptions, the warranty is designed to mitigate the economic impact on your business by offering coverage tailored to address the specific risks identified during the risk assessment.

Understanding Terms and Conditions of Cyber Warranties

Before committing to a cyber warranty, thoroughly understanding the terms and conditions outlined in the agreement is crucial. Pay close attention to coverage limits, exclusions, and the scope of protection offered. Clarify the circumstances under which the warranty will be activated and the specific incidents covered. This detailed understanding ensures alignment between your business needs and the assurances provided by the cyber warranty.

Cost-Benefit Analysis

Performing a cost-benefit analysis is essential to evaluate the financial impact of cybersecurity incidents on your business with and without cyber warranty coverage. Consider the potential costs associated with data recovery, system restoration, legal consequences, and damage to reputation. Compare these potential expenses against the investment in a cyber warranty to determine the cost-effectiveness of proactive protection. Compare the cost of a cyber warranty against possible financial losses resulting from a cyber incident. Investing in proactive protection can be a cost-effective strategy in the long run.

How Cyber Warranty Can Integrate with Existing Cybersecurity Solutions

Integration with existing cybersecurity solutions is crucial for businesses looking to seamlessly implement a cyber warranty. Ensure compatibility with your current technology stack and cybersecurity infrastructure. The goal is to create a cohesive defense strategy where the warranty enhances the effectiveness of your existing cybersecurity measures. Explore how the cyber warranty aligns with industry standards and best practices, providing a comprehensive security framework.

The Role MSPs Play in Helping SMBs Protect Themselves Financially

Cyber insurance is often perceived as a technology problem, and while robust technological measures are essential, the multifaceted nature of cyber threats requires a broader perspective. Cyber insurance, traditionally designed to provide financial coverage after an incident, faces limitations in addressing the evolving landscape of cyber risks. However, ​​the fundamental problem with cyber insurance is a misalignment of incentives between cyber insurers, SMBs, and their MSP partners.

As small businesses rely on MSPs for all their IT security needs, Managed Service Providers are pivotal in guiding their SMB clients through the complex cybersecurity landscape. They need a seat at the cyber insurance table in advising their clients on how integrating cyber warranty solutions into their core services can bridge the coverage gap by offering a more holistic approach to their overall security posture. For MSPs, adding warranty solutions creates a business model that’s easy for all parties to understand and utilize. 

In addition, MSPs can provide their customers with another layer of protection and peace of mind while creating a new recurring revenue stream.

Highlights on how a cyber warranty can enhance an SMB’s security posture:


Cybersecurity Beyond Technology:

  • Human Element: Many cyber incidents result from human error, such as phishing attacks or unintentional data exposure. Cybersecurity is not only about technological defenses but also about educating and empowering individuals within an organization.
  • Processes and Policies: Effective cybersecurity involves well-defined processes and policies. From access controls to incident response plans, the human element plays a crucial role in implementing and adhering to these protocols.


Bridging the Gap with Cyber Warranty:

  • Proactive Risk Mitigation: A cyber warranty goes beyond financial coverage by providing proactive risk mitigation. It is designed to warrant specific components within the technology stack, identifying and addressing vulnerabilities before they escalate into incidents.
  • Instant Funding Relief: In the event of an incident, a cyber warranty offers instant funding relief, facilitating swift recovery. This proactive financial support is a valuable complement to traditional cyber insurance, which comes into play after losses have occurred.


A Comprehensive Defense Strategy:

  • Integration with Technology: While cyber insurance focuses on the financial aftermath, a cyber warranty integrates with existing cybersecurity technologies. It complements technological defenses by proactively optimizing and standardizing toolsets, making the overall defense strategy more robust.
  • Human-Centric Approach: A cyber warranty encourages a human-centric approach to cybersecurity by emphasizing education, training, and implementing robust processes. This holistic perspective ensures the organization is fortified against a spectrum of cyber risks.


Addressing Human and Process-Related Risks:

  • Training and Education: Cyber warranties often include employee training and education provisions addressing the human factor in cybersecurity. Informed and vigilant employees contribute significantly to reducing the risk of incidents.
  • Process Optimization: The warranty encourages organizations to optimize their processes, ensuring that cybersecurity protocols are efficient and aligned with industry best practices. This proactive approach addresses vulnerabilities at the process level.


    Creating a Culture of Cyber Resilience:

    • Incident Response Planning: Cyber warranties typically come with well-defined incident response plans. These plans contribute to creating a culture of cyber resilience, ensuring that the organization is prepared to respond swiftly and effectively to any cybersecurity incident.
    • Continuous Improvement: A cyber warranty promotes continuous improvement in cybersecurity measures by focusing on proactive risk mitigation and optimization. This adaptability is crucial in the face of evolving cyber threats.

      A Call to Action for Enhanced Cybersecurity Posture

      As the cyber threat landscape continues to evolve, SMBs urgently need to enhance their cybersecurity posture. A cyber warranty, such as the one offered by Cork, provides a comprehensive solution. It combines advanced cybersecurity technologies with financial protection.

      Next Steps for SMBs

      • Assess your current cybersecurity measures and vulnerabilities.
      • Consider the proactive protection offered by a cyber warranty for comprehensive coverage.
      • Partner with an MSP equipped with the Cork Protection platform for expert guidance and implementation.

      Why Partner with an MSP?

      • MSPs bring expertise and experience to navigate the complexities of cybersecurity.
      • The Cork Protection platform, integrated with solutions from Barracuda and Liongard, ensures a robust defense.
      • Instant funding relief and fast claim payouts provide financial security in the face of a cyber incident.

      In the ever-evolving digital landscape, proactive measures are the key to resilience. SMBs that invest in a cyber warranty, backed by MSPs’ expertise and the innovative Cork Protection platform, position themselves for a secure and thriving future.

      Click below to learn how Cork’s Cyber Warranty can elevate your cybersecurity solution stack and enable you to add more value for your clients.