Every day, businesses around the world make decisions that will affect their ability to bounce back from a cyber incident. For brokers advising clients on cyber risk, data backup is one of the first practical controls to review as part of a broader data protection strategy. Without it, even a routine breach can quickly turn into a major claim.

The reality is that threats are evolving quickly. New research shows the global cost of cyber crime is projected to reach $13.82 trillion by 2028, up sharply from previous estimates—and that figure doesn’t account for reputational damage or lost customer trust. IBM found the average breach cost reached $4.88 million in 2024, much of it tied to downtime and recovery—the very areas strong data backup practices can reduce.

At that scale of loss, data backup becomes a financial safeguard, not just an IT function.

Why Corporate Data Backup Matters More Than Ever

In simple terms, data backup means keeping copies of critical business information so it can be restored after corruption, deletion, or loss. Yet too many small and medium businesses still treat backup as an afterthought. One report revealed that nearly one in five SMBs would be forced to close after a successful cyber attack, and a third would have to shut down even if the financial impact was less than $10,000.

Ransomware—a type of attack that encrypts systems and demands payment for release—remains a huge part of the threat landscape. According to 2024 breach reporting, ransomware appeared in roughly 44% of overall data breaches and was tied to 75% of system intrusion cases, showing how aggressively attackers are relying on extortion.

Backups make recovery possible without paying ransom or incurring extended operational downtime.

What Makes a Good Data Backup Strategy

A backup strategy should answer a few core questions for any business:

• Where are backups stored? On-site? Off-site? In the cloud?
  
• How long are backups kept? Daily… weekly… monthly?
  
• Can you restore to a specific point in time? (This matters after ransomware strikes.)
  
• Is data backed up immutably? Meaning it can’t be altered or deleted by attackers.

These details matter because carriers routinely review documented backup and disaster recovery processes before offering full Cyber Liability Insurance coverage or favorable pricing.

Most backup strategies fall into three categories:

Local Backups

Local devices can support quick restoration, but if they remain connected to the network, attackers may compromise them during a ransomware event—something carriers consider when reviewing recovery reliability.

Cloud Backups

Cloud storage provides off-site protection and geographic separation. Brokers should confirm whether clients use versioning and immutable storage, which preserve prior copies and protect backups from tampering. These features improve recovery after ransomware.

Network-Attached Storage

NAS systems centralize storage inside the office. Without a secondary off-site copy, however, a physical event or network compromise can still disrupt recovery.

No matter the technology used, your clients should have backups capable of restoring systems quickly after an incident.

Ransomware Insurance and Backup: How They Interact

Today’s Cyber Insurance policies—including ransomware insurance—increasingly require proof of a strong data protection foundation before offering terms. Insurers know that clients who can’t restore data after a breach are far more likely to file large claims. That affects the overall health of the market, which has seen dramatic pricing adjustments as loss severity and frequency have grown.

A client with well-defined backup policies, automated routines, and tested disaster recovery may qualify for better coverage terms. Backups shorten downtime, limit data loss, and reduce the financial impact on insured businesses—which, in turn, can make the risk more palatable for carriers.

How Data Backup Affects Cyber Coverage

Backup capability affects how quickly a business can restore operations after an attack. That recovery speed influences financial loss.

When a client questions the need for Cyber Liability Insurance or ransomware coverage, ask how they would restore operations after an attack—and how long they could afford to stay offline.

ProWriters helps brokers move from a discussion about risk to placing the right coverage for their clients.

If you need support addressing client hesitation, review Answer Your Client’s Cyber Insurance Objections.

To compare markets efficiently and align coverage with your client’s risk profile, register for Digital IQ or schedule a call with one of our Cyber Insurance experts.