Maintaining cyber insurance can be increasingly difficult and expensive. Here are some of the top cyber insurance requirements that businesses must meet.
According to Accenture, more than 68 percent of business leaders feel their cybersecurity risks are increasing. That’s no surprise really, especially when considering that data breaches exposed some 36 billion records in the first half of 2020 alone.
To mitigate some of the costs associated with cyber attacks, organizations must (and in some industries are mandated if they are to comply with data privacy laws) to invest in cyber insurance coverage to cover them against the risk of cyber security threats and data breaches.
Yet with the severity, frequency and sophistication of cyber attacks increasing year on year, these cyber insurance policies are becoming increasingly expensive and more difficult to maintain from a business perspective.
To help, we’ve created this blog where we look at some of the top things your business should keep in mind to maintain its cyber insurance policy. Before we get into that, let’s first take a look at what cyber insurance actually is and why it’s important.
Why is cyber insurance important?
A data breach can be hugely damaging for a business. In fact, 60 percent of small and medium-sized businesses cease to exist within six months of a cyber attack.
While large organizations likely won’t be forced to collapse, they will suffer serious consequences such as a loss in brand reputation, as well as hugely expensive fines. The Ponemon Institute and IBM estimate the average financial loss for a company to be around $4.24 million, with 38 percent of that total coming from lost business.
It’s for these reasons why cyber insurance is such an important precaution for any size business, and in some cases mandated under compliance regulations depending on the industry your business operates in.
What is cyber insurance coverage?
Cyber insurance, also known as cybersecurity insurance, is a type of business liability insurance that protects a business against cyber security risks and data breaches.
In addition to legal fees and expenses, cyber insurance typically helps with notifying customers about a data breach, restoring the personal identities of affected customers, recovering compromised data and repairing damaged computer systems or networks.
How to maintain your cyber insurance
To maintain your policy, there are a range of cyber insurance requirements that your business must meet on an ongoing basis. In addition, going above and beyond to convince insurers that your business is doing enough to reasonably protect sensitive data can help to lower your cyber insurance premium.
Here are a few data protection and data compliance initiatives your business should implement to help maintain your cyber insurance coverage and access lower premiums:
Use multi-factor authentication (MFA)
MFA requires users to provide multiple factors to verify their identity before gaining access to a network, account or system. The use of multi-factor authentication adds an additional layer of security to your network over the traditional single password, and many insurers are now requiring businesses to use MFA before insuring them.
Backup your data
Data breaches typically focus on stealing your data, blocking you from accessing that data and then demanding a ransom from your business for the return of that data (and they probably won’t ever return it even if you send them the ransom). If you have your data backed up in a separate location, you’ll avoid being blackmailed by cybercriminals.
Use data discovery software to gain data inventory
The key to any effective data protection strategy is understanding exactly what data your business has, where it lives and who has access to it. Data discovery software shows you your entire environment from one centralized platform, giving your business complete visibility into all of the sensitive data that you collect and store. Once you know where that data lives, you can classify all data types to create a catalog of your sensitive data.
Maintaining an up-to-date data inventory that classifies data by type will also demonstrate to insurers that you understand the sensitive data that your business has, and help insurers accurately quantify your business’s risk.
Make sure to provide cybersecurity training to employees
Many cybersecurity insurers will ask potential new customers whether they are providing their employees with regular cybersecurity training and best practice guidance. That’s because, typically, employees are one of the most common vulnerabilities into an organization’s network. Regular employee training shows insurers that your business is doing all it can to mitigate the risk that employees unknowingly pose.
Leverage your security partners to complete security questionnaires
Your business’s risk is constantly changing, and it’s important that your cyber insurance policy reflects the systems, threats and vulnerabilities that impact your overall risk. Whether you’re applying for your first policy or working on a renewal, you’ll likely be asked to complete a questionnaire as part of the insurer's risk assessment. If you outsource IT and security to a managed services partner (MSP), leverage their expertise to complete the questionnaire.
MSPs can easily answer questions related to your business’s IT infrastructure, systems configurations and security processes that you may not be able to answer yourself (without a lot of digging).
Interested in learning more about cyber insurance policies and how you can better maintain them through data discovery and classification?
Book a demo of the Cavelo Cyber Asset Attack Surface Management platform today.