Ransomware Threatens SMBs. Cyberinsurance Isn’t Always A Financial Backstop.

Cybercriminals are no longer concentrating their efforts on large enterprises; they’re increasingly directing attacks toward small and mid-market businesses. Cybersecurity Ventures projected global cybercrime costs would reach $10.5 trillion annually by 2025, up from $3 trillion in 2015, underscoring the economic incentives behind increasingly persistent and automated attacks, including those on SMBs.

A 2025 Guardz cybersecurity report found nearly half of U.S. small and midsized businesses experienced a cyberattack within the past five years, and more than one-quarter reported an incident in the last 12 months.

Ransomware remains among disruptive attack types for SMBs, often originating from credential theft or phishing. While technical recovery may take days, the financial aftereffects frequently persist far longer. (Global ransomware damage cost predictions, 2015 to 2031)

The financial consequences of cyber incidents extend beyond immediate remediation and includes recovery, downtime and operational disruption, not just ransom payments. Organizations that refuse to pay ransoms often incur higher total costs due to prolonged outages and manual recovery efforts.

Cyberinsurance remains an important tool for transferring defined risks, but it does not function as a comprehensive financial backstop. Coverage may be constrained when incidents stem from human error, social engineering or failures to follow required security controls.

In a Forbes article, Randy Sadler, a risk management expert at CIC Services, a captive insurance management firm, expands on the cyber risks faced by SMBs, and strategies to contain them.

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