For years, practically every company—large and small, in healthcare, technology, manufacturing, and other industries—has been a target of a cyber attack or has at least been exposed to a cyber threat. Sometimes it even seems like a new cyber security incident virtually every day, dominating news cycles and taking out significant banks, facilities, and more.
And while many of these companies are reacting in various ways, hiring security teams and beefing up their online security, there is one other avenue they can take that could prove just as beneficial. That avenue is cybersecurity insurance.
What is Cybersecurity Insurance?
Cyber liability insurance is a type of insurance that offers a variety of coverage choices to help organizations protect themselves from data breaches and other cyber security risks. Policyholders with cyber insurance can also use tools and resources to monitor and minimize cyber risk before and after a breach.
Cyber insurance, like all forms of insurance, allows companies and individuals to transfer a financial risk – in this case, the damage caused by a hack or data breach – to their insurer. The extent of that risk is determined by various criteria, including the size of your organization, your type of business, and how heavily you rely on web-based tools and services. As a business owner, you must also consider whether the expense of cyber insurance is justified or whether you would rather risk covering your damages in the event of a breach.
One important distinction in cyber insurance is between first- and third-party coverage.
Damages to your firm as a result of an attack are covered by first-party insurance and this covers repair costs, data recovery costs, missed revenue, and so forth. Third-party insurance, on the other hand, covers legal costs for privacy lawsuits, negligence claims, and other similar litigation. In general, both first- and third-party damages should be covered by a comprehensive cyber insurance coverage. Your policy’s particular terms are determined by the provider and insurance plan you select.
But How Do You Get Approved For Cybersecurity Insurance?
Any insurance typically has stipulations for those wishing to get said insurance, and cybersecurity insurance is no different. Here are some of the requirements for getting approved:
- Virus Software – Up-to-date virus software is essential for any business looking to get cybersecurity insurance. It is one of the first things most providers will look at. It is one of the first lines of defense, and if you do not show that you have even this bare minimum in place, then most insurance companies will not want to take the risk on your business.
- Risk Assessment- Most providers will conduct a cyber insurance risk assessment as part of their underwriting process to determine your premium, coverage limitations, and whether you even qualify for cyber insurance in the first place. This approach might range from a simple questionnaire to a full investigation conducted by a cyber security firm over several weeks. Depending on the size of your company, the provider might also require more assessments down the road.
- Cybersecurity Training- More than 80% of data breaches are caused by human error or compromised passwords. Training might be one of the best ways to help the average employee understand the risk and effectively combat cybercrime while defending your organization. Insurance companies want to know that you educate your staff on the threats they face, so many of them demand that you produce proof of cybersecurity training.
- Compliance Standards- Your business must track who has access to different files and resources to be eligible for cyber insurance. This procedure, also known as User Lifecycle Management, guarantees that your staff has all the rights they need to execute their responsibilities, but none that are redundant and capable of compromising security.
- Backups- A current and tested backup can save you hundreds of thousands of dollars in ransom, and it’s only one of the numerous factors that insurance companies consider when deciding whether or not to cover your company. Most experts advise using the 3-2-1 backup strategy, which entails having three copies of your data: one in production and two backups, one of which should be off-site and disconnected from your network. You should also verify your backups and restore essential app servers regularly.
In the end, your business can and will still be disrupted even if you have backups, risk plans, and assessments in place. Cyber liability insurance is vital to offset the cost of a data breach, but at the same time isn’t the first or only of your measures in place. Your best action is to have a plan and cybersecurity team in place to minimize the impact of a cybersecurity attack or breach.
Do you need more advanced cyber security to protect you and your business against online threats? Whether it is data breach prevention, secure cloud services, password security, or otherwise related to cyber security, BSuite Cyber covers it all. Contact us today at (312) 600-5610 or through email at [email protected] to learn more.