Whether your organization is large or small, you’re either preparing for a breach event, or recovering from one. As cyber threats continue to evolve and become more sophisticated, the demand for cyber insurance has steadily increased.
High-profile cyber attacks and data breaches have highlighted the potential financial and reputational risks that companies face. As data protection and privacy regulations (such as GDPR, CCPA, and others) become more stringent, companies are turning to cyber insurance as a way to manage potential regulatory fines and legal costs.
Cyber insurance policies are becoming more comprehensive, covering a wider range of cyber risks beyond just data breaches. This can include coverage for business interruption due to cyber incidents, ransomware attacks, and regulatory fines. Some cyber insurance policies now include access to incident response services, such as forensic investigations, legal counsel, and public relations support to manage the aftermath of a cyber incident.
The cost of cyber insurance premiums vary significantly based on factors like your company's industry, size, cybersecurity posture, and coverage limits, but premiums have been on the rise due to the increasing frequency and severity of cyber attacks.
What you need to know about cyber insurance
Cyber insurance is generally not mandatory for companies, but there are certain situations and drivers that prompt companies to consider obtaining a cyber insurance policy, including ransomware protection, regulatory compliance, and business continuity.
Insurance companies are placing greater emphasis on risk assessments and underwriting processes, so companies will likely need to demonstrate their cybersecurity measures and practices in order to obtain coverage.
The process of obtaining or renewing a cyber insurance policy involves several steps to assess a company's cybersecurity posture and determine the coverage and premium rates.
Here's an overview of the typical process and the requirements that insurance companies might ask for in terms of demonstrating security controls:
1. Application
The first step is to fill out an application form provided by the insurance company. This form will gather information about your company's operations, IT infrastructure, security measures, and any previous cyber incidents.
2. Risk Assessment:
Insurance companies will conduct a risk assessment based on the information provided in the application. They will evaluate the company's industry, size, data handling practices, security controls, and historical cyber incidents. This assessment helps the insurer understand the level of risk associated with insuring your company.