As cyber-attacks continue to proliferate, the costs of cybersecurity insurance are on the rise. Insurance providers are making changes that significantly impact the way businesses need to protect themselves. Insurers are increasingly requiring companies to adopt specific cybersecurity measures in order to qualify for coverage. This has led to a rise in the cost of cyber insurance, with premiums reaching as high as $100,000 per year for some businesses.
For small businesses, who are especially vulnerable, the rising cost of cybersecurity insurance can be daunting. However, it's important to remember that the cost of not having insurance is much higher. In the event of a cyber-attack, businesses without insurance can face steep financial losses. The increased cost of insurance is worth it for the peace of mind it provides. By taking measures to protect your business, you can make yourself eligible for coverage and help reduce the cost of premiums.
Here are some of the major factors and challenges companies face in both applying for cybersecurity insurance and in meeting the increased requirements of the insurance companies.
1. The increasing cost of cybersecurity response (or ransomware payment) insurance.
Cybersecurity response insurance is one of the most commonly purchased forms of cyber insurance. It covers the costs associated with responding to a cyber-attack, such as hiring a forensic team, notifying customers, and repairing damage to systems. In recent years, premiums for this type of coverage have increased significantly, often doubling or even tripling in cost.
2. The increasing number of data breaches.
Insurance providers are also raising premiums in response to the increasing number of data breaches. As more businesses are targeted by hackers, the risk of a data breach increases, and insurers must charge more to cover their potential losses.
3. The growing sophistication of cyber attacks.
The sophistication of cyber attacks is also increasing, making it more difficult for businesses to defend themselves against threats. This has led to an increase in the number of claims filed under cybersecurity insurance policies and has driven up premiums accordingly.
4. The expanding range of risks covered by cybersecurity insurance policies.
Cybersecurity insurance policies have also been expanding to cover a wider range of risks. In addition to covering costs associated with data breaches and cyber attacks, many policies now also provide coverage for ransomware payments, intellectual property theft, and business interruption caused by a cyber incident. This has led to higher premiums as insurers seek to spread their risk across a larger number of policies.
5. The difficulty in meeting insurer requirements for coverage.
Many businesses find it difficult to meet the requirements set by insurers for coverage under a cybersecurity policy. This can include having robust data security measures in place and demonstrating an understanding of potential threats and how to mitigate them. Businesses that cannot meet these requirements may be forced to go without insurance or pay higher premiums for less comprehensive coverage.
In addition, insurers are becoming more demanding in their requirements for coverage. They are no longer willing to simply provide coverage for damages that have been caused by a cyber-attack. They are now also requiring businesses to take steps to prevent such attacks from happening in the first place. This includes adopting specific cybersecurity measures such as installing firewalls and antivirus software, and training employees on how to protect themselves from cyber threats.
Businesses that want to obtain cyber insurance face several challenges in meeting these requirements. One is the cost of implementing these measures, which can be significant. In addition, many businesses lack the expertise needed to properly secure their networks from cyber threats. And even businesses that do have the necessary expertise may find it difficult to keep up with the constantly changing security landscape.
To overcome these challenges, businesses should take a holistic approach to cybersecurity. This includes not only implementing specific security measures, but also developing a corporate culture that is mindful of cybersecurity risks and taking steps to mitigate them. Businesses should also partner with qualified cybersecurity professionals who can help them assess their risk profile and design a security strategy that meets their needs.
1. Review your business's risk profile.
Before applying for cybersecurity insurance, businesses should assess their risk profile to determine how likely they are to be targeted by hackers. This includes evaluating their data security measures and understanding the types of threats they are most vulnerable to.
2. Implement robust data security measures.
Small businesses can protect themselves from cyber-attacks by implementing robust data security measures. This includes installing firewalls and antivirus software, encrypting data, and training employees on how to protect themselves from cyber threats.
3. Develop a corporate culture that is mindful of cybersecurity risks.
It's not enough to simply implement security measures; businesses must also develop a corporate culture that is mindful of the risks associated with cybersecurity and takes steps to mitigate them. This includes educating employees about common cyber threats and how to avoid them, establishing policies governing the use of technology, and regularly testing the security of their networks.
4. Partner with qualified cybersecurity professionals.
Businesses that lack the expertise needed to secure their networks from cyber threats should partner with qualified cybersecurity professionals. These experts can help businesses assess their risk profile and design a security strategy that meets their needs.
5. Stay up to date with the latest security threats.
The environment of cybersecurity is constantly changing, so businesses need to stay up to date with the latest threats and how to protect themselves against them. This includes subscribing to newsletters and blogs, attending industry events, and working with qualified cybersecurity professionals.
6. Regularly test the security of your networks.
Businesses should regularly test the security of their networks to ensure that they are protected against current threats. This can be done through penetration testing or vulnerability scanning tools.
7. Keep backups of your data in case of a breach.
In the event of a data breach, it's important to have backups of your data so you can continue operations without losing any information. Businesses should make sure that their backup plans are robust and include offsite storage in case of a ransomware attack."
By following these steps, businesses can not only meet the requirements of their cybersecurity insurance policy, but also improve their overall security posture and protect themselves from cyber-attacks.
The very first step in getting started with cybersecurity insurance is to review your business's risk profile. This includes assessing your data security measures and understanding the types of threats you are most vulnerable to. Once you have a better understanding of your risk profile, you can begin implementing robust data security measures to protect yourself from cyber-attacks. By following these steps, businesses can not only meet the requirements of their cybersecurity insurance policy, but also improve their overall security posture and protect themselves from cyber-attacks.
If you are a business looking for help securing your network from cyber threats, CTS Services, Inc. is the perfect partner. With many years of experience in the cybersecurity industry, we can help businesses of all sizes assess their risk profile and design a security strategy that meets their needs. Contact us today at 508-528-7720 or visit www.ctsservices.com to learn more!
Our blog posts are written by several members of our team. Please contact us if a particular post or topic is of further interest. We're here to help keep your business up and running.