What Do Cyber Insurance Policies Cover?
A good cyber liability insurance plan should cover expenses resulting from a cyberattack on your business’ infrastructure or data. This can include:
- Coverage to repair or rebuild infrastructure that’s been damaged following an attack
- Coverage to recover stolen, damaged, or altered data
- Coverage to get up and running again after a cyber ransom event, such as infection with cryptolocker software
- Liability coverage for legal expenses and crisis management following a customer data breach
- Liability coverage for investigations, and regulatory expenses/fines following a data breach
What Do Cybersecurity Insurance Policies NOT Cover?
Cybersecurity insurance is imperative to have in this day in age. However, Cybersecurity Liability Insurance will not protect:
- Loss of profits due to the theft of intellectual property/proprietary information
- New hardware/software upgrades after a breach has occurred
Recent Changes to Cybersecurity Insurance
With cyberattacks continuously on the rise, cybersecurity insurers are finding their policies are in much higher demand, and the associated risks have increased. This has led to a few key developments, including:
- Enhanced Underwriting Standards: Insurers are implementing stricter underwriting criteria, requiring businesses to adopt robust cybersecurity measures. This includes mandating controls like multifactor authentication and network monitoring to qualify for coverage. Long story short, your organization needs to have a superstar cybersecurity risk mitigation strategy in place before insurance companies will even consider you.
- Adjustments in Premiums and Coverage: After a period of rising premiums, the market has seen stabilization and even reductions in some areas. For instance, global commercial insurance rates fell by 1% in the third quarter of 2024, marking the first quarterly decline in seven years. Cyber insurance rates specifically decreased by 6% globally during this period.
- Focus on Identity Security and AI: With a surge in identity-based cyberattacks, insurers are emphasizing identity and access management. A survey indicated that 47% of cyber insurance claims were linked to identity and privilege compromises. Additionally, the rise of artificial intelligence (AI) has prompted insurers to assess its impact on cyber risks and adjust policies accordingly.
- Consideration of State Support for Uninsurable Risks: Major insurance groups are advocating for state involvement to manage financial losses from large-scale cyberattacks, especially those targeting critical infrastructure. They propose public-private partnerships to share losses from events currently deemed uninsurable.
- Standardization and Policy Clarity: Discussions are ongoing about standardizing cyber insurance policies to reduce ambiguity. However, insurers caution that over-standardization could limit their ability to adapt to emerging threats, emphasizing the need for flexibility in policy terms.
What Do You Need to Obtain Cybersecurity Insurance?
At the bare minimum, your company or organization should have these cybersecurity measures in place to prevent major damage. If you don't, you could be denied cybersecurity insurance for having too high of a risk.
Have an identity verification and access plan in place. This includes setting up Multi-Factor Authentication (MFA) for all employee accounts. MFA requires employees to use a specialized code sent to another device when logging into their email or other business accounts.
Have backups of important data readily available. Back up your data frequently and store it somewhere offsite/offline to prevent cyberthieves from compromising it.
Have a weakness management and patching plan. Create a written procedure that details when and how to patch hardware and software to prevent security weaknesses. Include procedures for End-of-Life software and hardware that are no longer supported. This either segregates them from the network or decommissions them.
Deploy an Endpoint Detection and Response Solution (EDR). Catch cyberattacks before they can do damage and prevent them from progressing further.
High-Value Items That Can Lower Your Cybersecurity Premiums
Various actions will drastically increase your ability to get a lower cybersecurity insurance premium. These actions are designed to strengthen your network security while keeping your employees informed and alert for potential breach attempts.
Have annual cybersecurity training sessions to keep all employees up to date on best practices to prevent cyber attacks. For example, you can perform phishing attack simulations and monitor employee performance.
Set up security and monitoring for your network. This can be done by deploying a Privileged Access Management (PAM) tool to keep unknown users off your network. In addition, you can create and monitor a 24/7 Security Operations Center, either internally or externally.
Create company procedures for dealing with cybersecurity best practices and what to do in case of a breach.
Enforce Sender Policy Framework (SPF) for incoming emails on company computer systems. This ensures that only employees of your organization can use your domain to send emails.
Risk Management Strategies That Will Lower Cyber Insurance Cost
The best way to lower the cost of cybersecurity insurance is to show the insurance companies that your business takes cyber threats seriously. Here are several measures you can take to do this and further reduce your risk of cyberattacks:
- Turn off admin rights on all employee devices. This keeps employees from installing questionable software on your devices that might contain malicious programs that can compromise your network.
- Limit the service accounts in the domain administrators’ group. The fewer accounts there are, the less likely one of them will be compromised.
- Test critical data backups from a full restore. Earlier, we mentioned that it was important to back up your data frequently. Testing backups on a regular basis ensures you always have access to your data.
- Deploy email tools that block malicious attachments, files, and other items running in sandbox mode. Email is still one of the most common methods cyberthieves use in attempts to compromise networks. With a strong set of email security tools, you can stop cyberattacks before they happen.
- Deploy a security information and event monitoring (SIEM) tool.
- Deploy a data loss monitor tool (DLP).
Taking these measures will prove that you're a step ahead of your industry when it comes to reducing cybersecurity risk. Cybersecurity risk management is the best strategy to lower the cost of your cyber liability insurance.