By Brett Bzdafka, principal product manager at Blumira. Originally published by VMBlog.
It's no secret that cyber insurance premiums surged 50% in 2022 as increased ransomware attacks and online commerce drove demand for coverage. However, despite the increasing prevalence of cyberattacks, only 55% of organizations have some kind of cyber insurance, and only 19% have coverage for cyber events beyond $600,000. The high cost of premiums might be a factor contributing to the low percentage of organizations with coverage.
Reducing cyber insurance costs involves implementing robust cybersecurity measures to minimize risks and demonstrate to insurers that the company is actively working to mitigate potential threats.
Let's take a closer look at the cybersecurity measures IT professionals can implement to help drive down insurance costs and find a policy that best meets their needs.
Cyber insurance: What can it do for you?
Cyber insurance provides financial coverage for the costs associated with a cyberattack or data breach. It can cover the costs of recovering lost or damaged data and the expenses related to restoring systems and networks. In the event of a cyberattack, an organization may face legal action from affected parties, regulators or business partners. Cyber insurance can help with these costs, as well.
In addition, cyber insurance policies often include coverage for incident response services, which can involve hiring security experts to investigate and mitigate the effects of a breach. Coverage can also extend to implementing security improvements and preventing future incidents.
Overall, it's clear why cyber insurance is an essential component of a comprehensive risk management strategy. It is important for organizations to carefully assess their specific needs and risks when selecting a cyber insurance policy.
Cyber insurance: Tips to lower premiums
IT professionals can take proactive measures to help reduce cyber insurance costs by demonstrating a strong commitment to cybersecurity, risk management, compliance and awareness.
Risk Assessment and Mitigation
IT professionals can conduct regular risk assessments to identify vulnerabilities and implement measures to mitigate these risks.
For instance, 98% of organizations worldwide are connected to breached third-party vendors. As a result, IT teams should understand the cybersecurity measures third-party vendors and partners utilize to minimize risks, such as breaches and data theft. It's essential that vendors adhere to cybersecurity best practices and standards and avoid hackers gaining access to vulnerable information.
By vetting these entities, IT teams can demonstrate a commitment to continuous improvement in cybersecurity practices and technologies. Insurers often offer better rates to companies that proactively manage risks.
Strong Security Measures
Implementing security software such as firewalls, intrusion detection systems, encryption and regular updates can be crucial in reducing cyber insurance costs by strengthening an organization's overall cybersecurity measures. Insurance providers often consider the level of risk when calculating premiums, and effective security software can help mitigate potential risks.
For instance, security software can assist in identifying and addressing vulnerabilities in other software, applications, systems and networks. Regular vulnerability assessments and patch management, facilitated by security software, contribute to a more secure environment, lowering the risk of exploitation by cybercriminals.
In addition, implementing security software that includes advanced threat detection capabilities enables organizations to identify and respond to security incidents more rapidly. Timely incident response can limit the scope and impact of a cyberattack, potentially reducing the financial losses associated with the incident. For companies with strong security practices, insurers may offer discounts and lower premiums.
Compliance With Standards
Complying with cybersecurity standards can have a positive impact on cyber insurance costs by demonstrating that an organization is taking proactive measures to manage and mitigate cyber risks.
Compliance with recognized standards provides a framework for achieving and maintaining robust security protocols. IT teams should adhere to industry standards and compliance regulations relevant to their business sector.
For example, cybersecurity standards, such as ISO 27001, NIST Cybersecurity Framework and PCI DSS, provide guidelines for identifying and mitigating cybersecurity risks. Following these standards helps organizations implement best practices in risk management, reducing the likelihood of security incidents that could require insurance claims.
Employee Training and Awareness
Employee training is a critical component of an organization's cybersecurity strategy, and it can play a significant role in lowering the costs of cyber insurance. Well-trained employees contribute to a more secure environment, reducing the risk of human error and the likelihood of security incidents.
The human element still makes up the overwhelming majority of cybersecurity incidents and is a factor in 74% of total breaches. Effective cybersecurity training helps employees recognize and avoid common cyber threats, such as phishing attacks and social engineering. A workforce that is educated about potential risks is less likely to fall victim to scams or inadvertently engage in activities that could lead to security incidents.
In addition, employee training programs can raise awareness about insider threats and the importance of safeguarding sensitive information. For example, insider threats may include negligent users who inadvertently cause security incidents due to carelessness or lack of awareness, such as sharing passwords, falling victim to phishing attacks, or accidentally disclosing sensitive information.
Phishing attacks are a common entry point for cybercriminals. Training employees to identify and report phishing attempts can significantly reduce the risk of successful attacks. Insurance providers may view organizations with comprehensive anti-phishing training programs more favorably, potentially lowering premiums.
Implementation starts now
Today's threat landscape makes it imperative for companies to fortify their defenses with robust cybersecurity measures and acquire adequate cyber insurance coverage. Reducing the costs associated with cyber insurance involves implementing comprehensive security measures that not only minimize risks but also convey to insurers a proactive commitment to mitigating potential threats.
By adopting a proactive stance and demonstrating a commitment to risk management, organizations can safeguard their digital assets and position themselves favorably to secure more cost-effective cyber insurance coverage in an increasingly complex and dynamic cybersecurity landscape.
