With the cyber threat landscape constantly evolving, organizations need to reassess their risk management strategies. To secure a policy or renewal with favorable terms, organizations should proactively implement the cybersecurity best practices insurers seek. It will help them lower their risks and improve their security posture.
Select a Service Provider That Provides Complete Coverage
While standalone cyber insurance policies have been available since the late 1990s, most organizations still use more conventional commercial insurance to cover their exposures. This approach is changing as CISOs become increasingly involved in discussions about and procuring their organization’s cyber insurance coverage.
It was difficult to buy comprehensive cyber coverage only recently because of the high premiums and the risk that the policy would respond to only some potential breaches. Fortunately, the market is stabilizing, and prices have moderated. While this is good news, the market remains complex.
As a result, companies are looking for ways to increase their coverage limits and get more robust financial protection in case of a breach. The good news is that several companies give a wide choice of alternatives to satisfy the requirements of various enterprises.
Look for a provider that offers coverage that fits your budget. The heightened threat of ransomware and data breaches has made cyber insurance a C-suite priority. Yet, many companies need help to secure or renew a policy. It is because cyber insurers are tightening their underwriting standards.
They require more detailed security questionnaires and use technology to assess risk. They are also increasing deductibles to help offset the costs of a potential breach. Firms like Fortinet advise businesses to implement measures to avoid paying large ransomware settlements. Insurance can provide protection but should not be the organization’s only defense against cyberattacks.
These increased requirements come on the heels of a rough couple of years for cyber insurers, which suffered large losses in 2020 and 2021 due to ransomware attacks and business email compromises. As a result, the cost of cyber insurance has skyrocketed. But shopping around for a provider offering lower coverage may be a good idea. Some brokers reduce their premiums to attract new clients and build a larger business book.
In addition, a good cyber insurance provider will offer flexible terms that allow businesses to choose their deductible amount. While these deductibles can add up, they are usually much less expensive than recovering from a data breach. It is particularly true for small businesses, where one incident can put their business out of commission for weeks or months, costing them millions in lost revenue. In addition, cyber insurance can cover many of the expenses associated with a data breach, including a ransomware settlement, customer notification, and legal defense costs.
Also Read: What is Ethical Hacking? A Comprehensive Guide on Ethical Hacking
Look for a Provider That Offers Resources and Support
The insurance market for cyberattacks has changed dramatically over the last few years. Previously, companies could obtain standalone cyber insurance policies relatively easily and reasonably priced. But in the wake of massive insurer losses, particularly during 2020 and 2021, prices increased significantly, with many requiring more detailed questionnaires, more advanced risk assessment technology, or stricter underwriting practices.
In addition, new upstarts smelling opportunity entered the market, often offering capacity where more established insurers had withdrawn or reduced their offerings. It has provided greater options for prospective insureds, although some newer policies have less mature pre-breach services and response support capabilities than those offered by older, more established players.
These factors and a growing awareness of the severity and frequency of cyberattacks have led to an upsurge in interest in standalone cyber insurance. A leading global commercial insurer, 64% of US companies have cyber coverage—either as a standalone policy or as an add-on to another type of business policy. However, it is important to remember that even though cyber insurance market conditions appear to stabilize, the industry remains volatile.
Look for a Provider That Offers Coverage Options
The threat of cyberattacks on the world economy is both present and expanding. They can disrupt operations, damage reputations and lead to significant legal costs. Many businesses are using cyber insurance to shield themselves from these threats. But with prices rising and coverage changing, choosing a provider with the right protection level for your business is important.
The market for cyber insurance has steadied, which is excellent news, albeit it’s still far from reaching the soft requirements of recent years. Insurance companies continue to tighten policy wording, which raises questions about aggregation exposure and systemic losses. In addition, insurers are limiting coverage in response to high-profile cyberattacks.
While these changes may make obtaining the necessary coverage harder for some businesses, it’s still possible. The key is to work with an experienced cyber broker who understands the nuances of the insurance industry and can guide you through the process. In the meantime, organizations must prepare by instituting strong security controls and incident response plans.
Additionally, they should look for a provider that provides ongoing risk assessments and recommendations to help improve their coverage and reduce premiums.
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