With the increasing frequency and expense of cyberattacks, business owners and administrators everywhere are wondering if their organizations are next in a cybercriminal’s crosshairs. And if they are, what can be done about it? Fortunately, insurance providers have been aware of this growing issue, too, so many have begun offering cyber risk insurance to both individuals and organizations as a whole. What is cybersecurity insurance and how can you know if you qualify for it? Let’s discuss:
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Cyberattacks are a real and present danger that can strike at the heart of an organization—even in 2018, 60% of all small businesses that were victims of a cyberattack were forced to close their doors. Now, with hackers becoming increasingly effective in their strategies, those odds don’t look good. A cyber risk insurance policy is designed to help your business recover from the financial losses caused that a cyberattack or data breach brings with it; it can help pay for credit monitoring, attorney fees, fines, and other expenses.
Especially considering the prolonged time period it takes to resolve, having financial support makes a critical difference. A 2021 study from IBM and the Ponemon Institute identified the average cost of a data breach as $3.86 million and the average time to identify and contain the breach totaling up to 280 days. A cyber insurance policy can pay for:
- Mandatory notification of affected parties
- Investigating and resolving security flaws
- Several years of credit monitoring for affected customers
- Loss of business opportunities.
Because the need for cyber risk insurance and the service itself are both relatively new, there are a lot of questions regarding how an organization can qualify for it. It’s also a risky asset for the providers to insure, so they tend to be pickier about who they insure and charge higher premiums to cover the risks. To determine a company’s risk profile, providers will look at the company’s loss experience, industry, location, and the security questionnaire. This questionnaire can be very complex: asking you questions about the security framework you follow, what you use for intrusion detection and security monitoring, how you manage backups and backup encryption, how you protect company data on mobile devices, and more. These were all questions that your managed IT providers should be readily able to answer.
Recently, though, some insurance providers have started taking it one step further: to validate the self-reported answers, they will conduct what is known as a penetration test (or pen test) to see if their experts can get into your system. If they can, the provider will likely follow one of three paths:
- Turn your application for insurance down
- Allow you to remedy the problems
- Be satisfied if you can provide proof that you’re moving toward a more mature cybersecurity posture.
Having a cyber risk insurance policy is essential, but it does not prevent a cyberattack, which is why you need a team of cybersecurity integrators to install your cybersecurity solutions. As leaders in the managed IT solutions, Innovative Integration knows what cybersecurity insurers are looking for when deciding whether to start or renew coverage for your organization and we want to help you get the protection you need! Contact Innovative and renew your cyber insurance while reducing risk.