While organizations are increasingly taking more robust security measures, cyber security incidents are unavoidable, especially since threat actors are continuously coming up with new sophisticated ways to breach defenses. And given that the average global cost of a data breach is $4.35 million, there’s a need to prepare for the worst.
So how can you do that? This is where cyber insurance comes in. This post will cover what cyber insurance is, including the changes this type of insurance has seen in the recent past.
What is Cyber Insurance
Cyber insurance is the coverage that an organization acquires to protect against losses incurred due to a data breach or other malicious security incidents. The exact coverage will vary, but it can include things like legal fees, costs of notifying customers, cost of business interruption, cost of repairing damaged software and hardware, and sometimes ransom payments.
First-Party vs. Third-Party Cyber Insurance Coverage
Most businesses that take cyber insurance often prefer first-party coverage. However, in some instances, third-party coverage would be ideal.
First-party coverage protects the company directly affected by the cyber security incident. On the other hand, third-party coverage protects companies that offer professional services against potential legal action by clients due to a data breach event or any other form of attack.
Cyber insurance is risk-based, meaning most firms require certain criteria to be met before renewing or beginning coverage. Also, there are specific things FTC recommends your coverage should include for it to protect you adequately.
That said, cyber insurance isn’t enough on its own and should be combined with a solid cyber security program.
What’s Changed in Cyber Insurance
Now more than ever, cyber insurance is important, especially given that ransomware and other attacks are on the rise. This trend is not expected to slow down, with an attack estimated to occur every two seconds by 2031. At this point, cyber-attacks are a matter of when and not if.
So what changes has the increase in cyber attack incidents brought forth:
1. Increased Need for Cyber Insurance
Previously, most organizations considered cyber security an afterthought. The increasing cases of cyber security events have changed this. More and more businesses are taking cyber insurance to cushion themselves against the high costs of being a cyber attack victim. Depending on the type of coverage you take, cyber insurance can help you settle costs such as legal fees, ransom payments, and data recovery services. In short, cyber insurance acts as a safety net in case you become a cyber attack victim.
2.Requirements for Insurance Companies Have Become Stricter
The requirements of insurance companies are getting stricter by the year. This is primarily caused by the increasing cyber threat landscape. The requirements may vary by provider, but here are some of the common ones:
- Multi-Factor Authentication (MFA): This provides extra security by requiring users to use two or more verification factors to gain access to a resource such as an account or an application.
- VPN: VPN encrypts your internet traffic on unsecured networks, thereby safeguarding your online identity and shielding your data from unauthorized third parties.
- Endpoint Protection and Response: This is an endpoint security solution that monitors end-user devices to identify and respond to various cyber threats. This includes advanced Anti-virus and should include an active alert and response plan.
- Zero Trust. This newest approach to cyber security is strongly recommended by the FBI and the Cyber Security and Infrastructure Security Agency. Many underwriters are looking for Zero Trust in companies security posture.
- Immutable and Offsite Backups: Immutable and Offsite backups offer protection against data loss due to a breach, a hardware failure, or a complete system crash. With offsite backups, you can regain your data in case of these events. Immutable means there is a version or instance of the backup that cannot be written to or changed.
- Cyber security Awareness Training: Employees are the weakest link in your cyber security. Cyber insurance firms require that you offer cyber training to your employees to reduce your chances of being breached.
Not having these requirements may result in higher premiums or not being able to get coverage at all.
3. Increased Costs
The surge in attacks has led to an increase in demand for insurance and increased premiums to go along with it. However, the cost is worth it, considering how much you could lose from an attack and how likely it is that one will occur.
How Rose Computer Technology Services Can Help
Partner with a cyber security firm to meet your cyber security needs and help mitigate attacks. Rose Computer Technology Services is a CompTIA Certified firm that has been keeping business safe for over 25 years. We use a security first approach to keep your company safe from cyber incidents. We can also help you get ready for cyber insurance by helping you meet the requirements you need. Schedule a security consultation today.