Although Cybersecurity insurance has been around since the nineties, providing coverage to larger enterprises for data processing errors and online media, it is still a relatively obscure concept among small-to-medium businesses (SMBs).
In recent years, policies related to this form of liability coverage have been altered. Modern cyber insurance plans encompass the typical outlay associated with a data breach event, encompassing everything from resolving malware infestations to fixing compromised accounts.
Cybersecurity insurance policies can provide coverage for expenses relating to:
- Recovering data that has been compromised
- Repairing and or removing computer systems
- Notifying customers about a data breach
- Providing post-breach personal identity monitoring
- Investigating a breach with forensic IT
- Legal expense
- Ransomware payments
Data breaches have been at an all-time high this year, with a 14% surge from the previous year. The first quarter of 2022 has set a new record for the most recorded violations in history! With no sign of slowing down, companies must stay vigilant and take steps to prevent costly data breaches before it’s too late. In today’s digital era, no company is immune to cyber threats. Unfortunately, this rings especially true for small businesses; they not only have a higher chance of being attacked but also face more significant consequences when an attack occurs, as nearly 60% are forced to close their doors within six months of an incident.
The cyber liability insurance industry is constantly transforming to avoid online threats and costly breaches. Businesses must stay up to date with the latest trends to remain secure. Here are a few key developments you should be aware of regarding cyber liability insurance.
Demand is continually increasing.
The shocking reality is that data breaches can cost an average of $4.35 million globally and more than double in the U.S. alone, coming out to a staggering $9.44 million! Companies all over are recognising how vital getting cyber insurance is – it’s just as critical as their business liability insurance because they risk going under if they don’t have it when facing a breach. With demand for this type of coverage rising, we’re sure to see even more availability and options tailor-made for those looking into cybersecurity insurance policies soon enough!
Premiums are also on the rise.
As cyberattacks surge, the cost of insurance premiums will skyrocket by an astonishing 74% in 2021. Lawsuits, ransom money and other repairs have driven this increase as insurers are unwilling to take a loss on cybersecurity plans. Unfortunately, these policies are becoming increasingly expensive at the same time that they are more essential than ever before.
Some Coverages are now Excluded.
It is becoming increasingly difficult for customers to find coverage for certain risks, such as those posed by nation-state attacks. These cyberattacks originate from a government entity and may be connected with known hacking groups. Therefore, paying attention and protecting against ransomware threats that can impact businesses and individuals is essential.
In 2021, 21% of nation-state attacks were aimed at consumers, while 79% targeted enterprises. Therefore, if an insurance policy excludes coverage for these types of attacks, be sure to stay away! Furthermore, ransomware attack payouts are also being excluded from specific policies. Unfortunately, between the first and second quarters of 2022, there was a 24 per cent rise in ransomware assaults – so you must purchase adequate protection now more than ever before.
Insurance companies are fed up with unsecured clients expecting them to pay the ransom. That’s why many carriers have begun excluding ransomware from their policies, leaving organisations with a heavier burden of protecting themselves. To combat this problem, businesses must have an effective backup and recovery strategy.
It has become much more complicated to qualify.
If you’re looking for cybersecurity insurance, don’t assume you’ll be accepted. The requirements are becoming much more demanding, and insurers can no longer afford to take risks on businesses with poor cyber habits.
Insurance carriers take into consideration several factors before deciding on coverage, including the following:
- Network security
- Use of multi-factor authentication
- BYOD policy
- Security policies, including device and data
- Advanced threat protection
- Automated security processes
- Backup and recovery strategy
- Admin access to company systems
- Employee security training
When applying for cyber insurance, you’ll face a significant and comprehensive questionnaire. Having your IT partner lend their expertise makes the process easier and unearths potential security enhancements that would otherwise go overlooked. Take note: just like other types of coverage, taking steps to reduce risk can often decrease premiums too!
Reviewing your cybersecurity before getting cyber insurance is an intelligent move and can also help you save time and money. Plus, this could highly reinforce your security against potential cyberattacks.
Need Help Making Sense of Cybersecurity Policies?
The paperwork and applications can become quite intricate when exploring cybersecurity insurance. Misunderstanding or providing incorrect answers on a form could lead to paying hundreds of dollars more in premiums than necessary or render a future claim void. To ensure you are well informed about your policy details and receive appropriate counsel, contact us at once for an appointment so that we can help guide you through this process!