Businesses take out insurance for all kinds of reasons — property insurance, liability insurance, and even protection from natural disasters. But what about cyber insurance?
In a world where organizations face more cyber threats than ever, it only makes sense to take steps to insure yourself. Many businesses are already doing this, and the cyber insurance industry is predicted to grow to $20 billion by 2025.
In this article, we’ll show you how cyber insurance works, why you might need it, and the steps you’ll need to take to ensure you qualify.
What Is Cyber Insurance?
Cyber insurance works much like other types of insurance. It’s a contract you enter with an insurance provider that is designed to protect you against common cyber risks like attacks, data breaches, and legal issues.
There are many different options for cyber insurance, depending on the specific risks you face and how much protection you need.
Why Do You Need Cyber Insurance?
Cyber insurance can’t protect you from cyber threats, of course — that’s down to your own security teams and infrastructure.
What cyber insurance can do is provide help in the aftermath of an attack. Your insurance may be able to cover the financial costs that result from a data breach or ransomware attack, for example. On top of that, some cyber insurance providers can assist you when it comes to getting your systems back up and running in the wake of a disaster.
In other words, a good cyber insurance policy can prevent a stressful cyberattack from turning into a complete catastrophe.
What Should Your Cyber Insurance Include?
While cyber insurance policies can vary drastically, here are some of the things you should expect your cyber insurance to cover:
- Financial losses arising from a cyberattack. Insurance will typically cover direct losses that come from the theft of assets, data, and money.
- Legal costs. For example, if a client decides to take action against you for the breach of their data.
- Assistance to deal with the cyberattack. Your cyber insurance should then help you recover in the aftermath to minimize downtime and reputational damage.
How to Qualify for Cyber Insurance
Not every business is eligible for cyber insurance. Most providers will ask for evidence that you’re already taking steps to secure your business against attacks before they agree to insure you.
Let’s take a look at some steps to follow to maximize your chances of qualifying for insurance.
Have Strong Access Controls in Place
Strong access controls are one of the most fundamental aspects of cybersecurity, and cyber insurers will typically look for evidence of this.
Access controls allow you to set rules to decide who can access specific assets, data, and networks. For example, users might need to verify their identity and role before they can access sensitive data related to customer finances. This helps prevent attacks like phishing by adding an additional layer of security between private information and the outside world.
Compliance With Regulations
One of the most important things cyber insurers look for is your compliance with relevant data privacy regulations like GDPR, CCPA, and HIPAA. Since insurers will often provide legal assistance in the aftermath of cyber events, they will want to see evidence that you have taken concrete steps to comply here, and aren’t at risk of violating any of these legal frameworks.
Have Clear Incident Response Plans
In the event of a cyberattack, do you have a plan? Incident response plans give you a clear framework to follow when the worst happens, allowing you and your teams to respond to attacks quickly and effectively without confusion around who needs to do what.
Cyber insurers expect to see evidence of incident response plans because they show that you’re invested in mitigating the effects of cyberattacks and minimizing damage to your assets, reputation, and finances.
Conduct Regular Vulnerability Assessments
Vulnerability assessments allow you to identify any weak points in your organization’s security so you can take steps to remedy them. These vulnerabilities can range from simple things like weak passwords to more complex issues like a poorly configured firewall or badly protected endpoints.
Carrying out regular vulnerability assessments allows you to quickly pinpoint these weaknesses so you can fix them before bad actors can exploit them. This shows insurers that you are taking a proactive approach to your cybersecurity.
Regular, Ongoing Training
It doesn’t matter how much money you invest in cybersecurity if the individual humans working in your organization aren’t aware of the risk. It only takes one phishing scam victim or weak password to cause a ton of issues for your entire business.
The best way to combat this is to provide regular security awareness trainings where your team members learn about all the relevant risks and threats along with the steps they can personally take to stay safe. This is a simple step that will show insurers you are taking security seriously.
A Focus on EDR
Endpoint Detection and Response (EDR) is a crucial element of cybersecurity today. It involves constantly monitoring the various endpoints of your network and taking quick action when any threats are uncovered.
This is another way of showing cyber insurers that you are taking a proactive approach to your security instead of waiting for attacks to happen before you respond.
Maintain a Strong Record
One of the biggest red flags for cyber insurers is a history of cyberattacks. This means one of the best things you can do to boost your chances of qualifying for insurance is to maintain a clean security record with no serious attacks.
All of the steps above, as part of a strong overall cybersecurity policy, will help you achieve that. For best results, consider working with a third-party security partner who can guide you through the process of defending your organization and provide the right technologies and tools to succeed.
At DYOPATH, that’s exactly what we do. If you’re ready to start taking security seriously and build an organization that insurers will be happy to work with, contact us.
