The evolution of cybersecurity insurance can be traced back to the early 1990s when the first policies were developed to protect businesses from the emerging threat of cyberattacks. In the early 2000s, the growth of the internet and the increasing sophistication of cyberattacks led to a surge in demand for cybersecurity insurance. As a result, insurers began to offer a wide range of policies with more comprehensive coverage. These policies typically covered a variety of risks, including data breaches, system outages, and extortion attacks.
Today the demand for cybersecurity insurance continues to grow. As a result, insurers are developing new and innovative policies that offer even more comprehensive coverage. These policies now can cover a wide range of risks, including ransomware attacks, social engineering attacks, and supply chain attacks.
But here’s the rub: It’s getting harder to purchase adequate cybersecurity insurance coverage. It’s a complicated product that requires a thorough understanding of the organization’s technology infrastructure, potential vulnerabilities, and risk management processes. This complexity, combined with the fluid nature of cybersecurity risks and lack of historical data, makes insurers cautious and their cybersecurity insurance policies pricey, especially for smaller companies that may not have the resources to invest in comprehensive cybersecurity measures.
Moreover, cybersecurity policies need to be updated regularly to keep up with the changing risks. This can be difficult for insurers to manage and also makes it tricky for businesses to assess what coverage they need.
Despite all these challenges, there are several steps organizations can take to increase their chances of getting adequate cybersecurity insurance coverage at a manageable cost:
- Assess Your Cybersecurity Risks: Conduct a thorough risk assessment to identify potential vulnerabilities in your systems and networks. This will help you understand the specific risks your organization faces and enable you to take steps to mitigate those risks.
- Implement Strong Cybersecurity Measures: This includes firewalls, encryption, multi-factor authentication (MFA), always-on monitoring, automated alerts and responses, a vendor risk management program (VRM), and incident response plans. Having strong cybersecurity measures in place will demonstrate to insurers that you are taking cybersecurity seriously and are less likely to experience a costly breach.
- Implement Cybersecurity Awareness Training for Staff: People are the weakest link in every cybersecurity program. After all, employees getting tricked into handing over their credentials are responsible for more than 60 percent of all breaches. Cybersecurity awareness training and a simulated phishing attack schedule will keep staff vigilant.
- Document Your Cybersecurity Policies and Procedures: Document policies and procedures and make sure they are regularly updated and communicated to employees. This is especially important for growing business with expanding teams and/or M&A strategies. It will also enhance your enterprise value to acquirers or growth capital sources.
- Be transparent with Insurers: Transparency with insurers about your cybersecurity risks and the steps you take to mitigate those risks is key. This will help insurers understand your risk profile and provide coverage that is tailored to your specific needs.
- Be in compliance with Insurer requirements: Making sure you are meeting cybersecurity mitigation requirements is key to avoiding disqualification on a claim if an incident occurs.
- Work with an experienced advisor: Lean on an expert that is vendor-agnostic and can help you navigate the complexities of cybersecurity insurance. This advisor should be able to help you with all of the steps above and negotiate policy terms and coverage limits that are appropriate for your organization’s needs. Moreover, keep you informed on the latest Cyber tools available to ensure your organization continues to evolve in the Cyber landscape.
These suggestions will lower your risk profile and increase your chances of getting cybersecurity insurance at reasonable premiums, ensuring that you are adequately protected against the financial and reputational damage that can result from a cybersecurity attack.
Our team can help you through the process and dramatically increase your chances of qualifying for a cybersecurity insurance policy that doesn’t break the bank. If you’re interested in learning more about our approach or have any questions about cybersecurity in general, contact your Amplix representative or email firstname.lastname@example.org.