In 2021 the Colonial Pipeline attack denied consumer access to gas on the east coast. The pipeline was shut down for five days and cost the company and consumers millions of dollars.
This national crisis was one of many cybercrimes in 2021 that caused the cost of cyber insurance to rise. With the writing on the wall, 69% of surveyed organizations expect to see a rise in cyber defense spending with 25% expecting to see double digit growth in cyber budgets.
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As we turn to the internet increasingly for day-to-day interactions and transactions, it is no surprise that cybercrime is on the rise. The cost of cyber insurance has been steadily increasing since 2008, reflecting this increase in risk.
S&P Global reports that insurers will be reducing their pay out limits for ransomware attacks and rate adjustments could be close to 100%. With the cost for cyber insurance continuing to rise and the pay outs decreasing it is more important than ever that companies have a managed security service provider, or MSSP, to ensure their informational security.
It can be challenging to know what your business needs when it comes to cyber security. Here are some things you need to know before you buy or renew your insurance policy.
What is cyber insurance?
Cyber insurance is a type of private insurance for businesses that covers the cost of cyber security breaches. It is designed to cover expenses incurred when your business suffers a data breach or other cyber-attack.
The primary form of cyber insurance is known as "cyber liability coverage." This type of policy provides protection against lawsuits filed by customers, employees, and others who have been harmed by your business's cybersecurity negligence. The coverage also protects against the cost of notifying individuals who have been harmed by a data breach, restoring damaged data, and providing credit monitoring services to those affected.
Cyber liability policies come with exclusions for losses incurred from hacking-related extortion demands – so it is important to check with your broker before buying a policy to make sure you are adequately covered.
You may also want to consider a more thorough policy if you have significant amounts of sensitive data on file or if your company relies heavily on financial transactions such as e-commerce sales. These two factors can increase your risk of being targeted by hackers and put your company at higher risk of suffering losses from a cyber-attack. In this case, you will want to investigate cybercrime insurance which offers protection for property damage and monetary loss due to theft or fraud committed through computer hacking, sabotage, or extortion through one of the most feared attacks, ransomware.
Types of cyber insurance.
There are many types of cyber insurance depending on need and company size. Policies tend to fall into one of two categories: business interruption and data breach coverage.
Business interruption cyber insurance is designed to cover the costs of lost revenue and expenses when your business shuts down due to a cyber-attack. Data breach cyber insurance covers the cost of notification, credit monitoring, and identity theft services for those who have been affected by a data breach. An umbrella package such as a business owners policy will bundle together multiple policies for total coverage.
Cyber insurance rules have changed.
Your renewal policy will no longer have a box that you can check confirming you practice safe cyber. You will now need to show proof that you require multi-factor authentication, have closed remote desktop protocols, offer regular cybersecurity training to employees, and are up to date on patches for software. Not having these items in place can reduce the amount covered for loss, including ransomware, and put your company in a dangerous position.
Cyber insurance and your business.
Cyber insurance is a lot like any other type of insurance—it is designed to protect you from the cost of a covered loss. The key difference between cyber insurance and property or liability insurance is that cyber insurance is designed specifically to cover losses caused by cyber incidents.
The risk mitigation measures needed to ensure proper coverage can all be met by a managed security service provider (MSSP). Your MSSP will be able to implement all the mitigation measures needed and provide documentation for your insurance agency. If you are currently under a managed service provider (MSP) now is time to reach out to them and discuss the upcoming need to increase your coverage.
Your MSSP should provide a variety of services including:
- Regular security risk assessments
- Collaborative defense strategy and budgeting guidance
- Infrastructure hardening
- Phishing tests and cybersecurity training
- Dark web credential monitoring
- Vulnerability Management
- Managed Detection & Response (MDR) strategies including SIEM/SOC services
- Threat intelligence
- Guidance with information security policy
- Compliance as a service
- Penetration testing options
DKinnovative provides optional managed security services to all their clients. Our proactive approach and threat intelligence methods will shield your company from the dangers that are on the horizon and enable your company to work knowing that you are safe.
DKB provides full service MSSP clients with a vCISO, this fractional information security officer is a key component to reducing your premiums and meeting risk requirements. A vCISO will work with your business budget and strategy to protect your assets and revenue.
You can find out more about our full service MSSP here.
Conclusion
Cyber insurance is necessary for any business that does business online. The cost of cyberattacks can be devastating. That is why it is so important to have the protection of cyber insurance. Cyber insurance can be used to cover lost revenue, legal fees, IT costs, and more.
Cyber insurance premiums and risk mitigation requirements are increasing exponentially in the wake of 2021 cyber-attacks. This means that the investment in your company’s cyber security and the burden of meeting insurance requirements is going to increase. Having a MSSP in place that can easily meet the needs of your company before you start or renew a cyber insurance policy, can ensure the best value from your insurance policy.
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