Navigating Cyber Risks: Stoïk’s Innovative Approach to Cybersecurity Insurance for SMEs

 

In today’s digital landscape, cyber risk has emerged as a critical concern for small and medium-sized enterprises (SMEs) worldwide. While many companies strive to bolster their cybersecurity defenses, they often overlook an essential strategy: transferring these risks to third parties. Recognizing this gap, French startup Stoïk has introduced a specialized cybersecurity insurance product tailored to meet the needs of SMEs, raising €25 million (approximately $27 million) in a recent Series B funding round.

The Need for Cyber Insurance

Cyber incidents can have devastating impacts on businesses, particularly SMEs that may lack the resources to recover from significant disruptions. Traditional insurance products often fall short in addressing the complexities and unique challenges posed by cyber threats. By focusing specifically on the needs of smaller businesses, Stoïk aims to provide a comprehensive solution that not only mitigates financial losses but also supports businesses in their recovery efforts.

Stoïk's Unique Offering

While companies like Coalition and At-Bay have made strides in the cyber insurance market, Stoïk distinguishes itself by targeting European businesses exclusively. The startup covers companies with annual revenues of €750 million or less, offering coverage limits of up to €7.5 million. This focused approach allows Stoïk to tailor its products to the specific regulatory and operational landscapes of European markets, ensuring that clients receive relevant and effective coverage.

When a business is insured by Stoïk, it gains protection against various cybersecurity-related claims. For example, if a cyber incident forces a company to halt production or temporarily close, Stoïk can compensate for the resulting loss of revenue based on gross operating margins. This feature is crucial for SMEs that often operate on tight margins and cannot afford prolonged downtimes.

Proactive Crisis Management

Understanding that the cyber insurance landscape is more intricate than traditional insurance, Stoïk has developed a robust in-house crisis management team. This team is dedicated to responding to incidents and assisting clients with data recovery and crisis communication. The startup’s proactive approach aims to minimize the damage from cyber incidents and supports SMEs in navigating the aftermath of an attack.

“Since the beginning of the week, we’ve had a dozen attacks on our portfolio, including a major one,” shared co-founder and CEO Jules Veyrat during a recent interview with TechCrunch. “We have people mobilized in the Lyon region for a ransomware attack that brought an industrial company to a standstill.” This insight underscores the reality of the cyber threat landscape, where businesses must be prepared to respond swiftly to incidents.

A Growing Market

As cyber threats continue to escalate, the demand for cybersecurity insurance is expected to grow. SMEs, in particular, face increasing scrutiny regarding their cybersecurity practices, and many are recognizing the importance of transferring risk through insurance products. Stoïk’s focus on this underserved market positions it well for future growth as businesses seek effective solutions to manage their cyber risks.

With its innovative approach and dedicated support for SMEs, Stoïk is not just selling insurance; it’s fostering a culture of preparedness and resilience in the face of cyber threats. As the digital landscape evolves, Stoïk stands at the forefront of a critical movement, helping small businesses safeguard their futures against the ever-present risks of the cyber world.