Cybercrime is very opportunistic. Attacks and cybercrime are increasing daily. Everyone whose company and commerce depend on technology is in danger. Major losses happen without the victim being aware of them. News of data breaches has started to dominate the news practically every day. Yet, law enforcement is powerless to stop them. The losses now outweigh the sum generated by the illicit international drug trade.
Still, not many have turned towards insuring their cyber possessions. Because everything is currently carried out online, from applications to fundamental business operations, it is not wise to ignore cyber security insurance due to the severity of breaches.
According to projections, the size of the worldwide cybersecurity insurance market will increase from USD 11.9 billion in 2022 to USD 29.2 billion by 2027, with a CAGR (compound annual growth rate) of 19.6% over the course of the forecast year.
Working Process of Cyber Insurance
Like other types of insurance, cybersecurity insurance operates in a similar manner. Many providers of business insurance, including errors and omissions insurance, liability insurance, and property insurance, also sell policies and work to protect the interest of their clients.
Cyber insurance policies include first-party coverage, which refers to damages that directly affect an entity, and third-party coverage, which refers to losses incurred by other organizations due to doing business with the affected organization.
Cyber security insurance works to cover an organization’s financial damages due to a data breach or cyberattack. Additionally, it helps businesses defray any expenses associated with the remediation procedure, such as paying for an investigation, legal counsel, crisis communication, and customer reimbursements.
The Current Market for Cyber Security Insurance
Because other standard company insurance plans were not developed to cover the risks most frequently associated with cyber insurance, cyber insurance emerged on the insurance landscape. Since its emergence, it has been used by some businesses to insure their cyberspace.
According to many insurance experts, the field of cyber insurance is still in its infancy, and much effort needs to be made to standardize coverage and ensure that insurance companies can meet the needs of modern enterprises.
However, due to the revamping and re-release of cyber security insurance, the cyber insurance space continues to overgrow as more companies use its policy to safeguard their operations. Additionally, cyber security insurance policies are becoming less broad and more industry-specific. This helps businesses narrow down to the policy they want for their organization.
One reason cyber security insurance is on the rise is that it helps all organizations and enterprises reduce losses from daily cyber disasters, such as data breaches involving sensitive customer information and network disruptions. Although cyber security insurance does not protect any organization against the hack, it offers help before, during, and after an attack.
It is estimated that cyber security insurance premiums, which currently cost $5 billion yearly, will rise 20% to 30% per year on average soon.
The Revamping of Cybersecurity Insurance Policies
Given the dynamic and ever-changing nature of cyber-risks, cybersecurity policies can vary.
The biggest reason for the revamp is the massive increase in cyberattacks over the last two years. According to a report, cyberattacks increased from the middle of 2020 to the end of 2021.
As a result, the increase in ransomware has shifted the focus of businesses from guaranteeing they have the correct defensive cybersecurity measures to auditing both prevention and disaster recovery.
Therefore, the rise in cyberattacks of all stripes calls for tighter regulations and more constrained coverage.
Cyber security Insurance policies cover
- Data thefts/breaches
- Cyberattacks on the information you provided to suppliers and other third parties.
- Network attacks by hackers
- Worldwide cyberattacks
- Terrorist acts
- Network maintenance
The Recommended Cyber Security Insurance Policy You Need
Like most insurance coverages, cyber security insurance comes with a deductible.
It is strongly recommended you begin with the $1M policy for a minimum. This policy comes with a $10,000 deductible. Cyber security insurance policies range from $1 million to $5 million.
Although the premiums of cyber security insurance coverage may seem expensive, the dangers of not having one are far greater. According to cyber security research, 60% of small businesses that experience a cyber attack go out of business within six months.
Depending on how insured you want your cyber network, you can choose between the $1M to $5M policy.
Because cyber security insurance lessens the effects of an attack and aid in your recovery after serious incidents, this makes the price worthwhile.
What The New Cyber Security Insurance Means for Your Business
The revamping and re-releasing of the cyber security insurance requirements mean that you and your IT team can prepare adequately for renewal. In order to prevent application rejection, you need to have the right procedures and frameworks. The good news is that the majority of these standards will also lessen your systems’ attack surfaces and aid in preventing cyberattacks that could harm your company
Among the new specifications are:
- Multi-factor authentication (MFA) on all of your insured resources to prevent credentials from being stolen
- Regular testing of all your systems to check for security
- Employee awareness training for cybersecurity
- Data backups so you can recover from a ransomware attack without having to pay the demanded ransom
- VPNs for all remote desktop services
- Audits of third-party vendors
- Current antivirus software with endpoint detection and response (EDR)
Ready to Protect Your Business From Cyber Attacks with Insurance?
Although it may appear pricey, cyber security insurance is essential given the present state of cyber threats. If you are unsure about what policy is right for you and how much coverage you need, consult an experienced insurance provider.
It’s important to note that insurance companies are not in the business of paying out claims. When you apply for a policy you most likely will be presented with a detailed application of what security controls your business currently has in place. An experienced partner is needed to ensure the application is submitted with the most accurate information. If it is not, you risk denial of a potential claim on your policy. Security is best implemented in layers and a solid cyber security insurance policy is an additional layer to minimize risk to your business. The policy is not a substitute for security implementations but rather a complement to lower the surface area of attack to your business.
At C Solutions, we’ve helped businesses in Orlando take proactive steps to bolster their cybersecurity so they can prevent and recover from cyber incidents.
Schedule a free consultation today! Call 407-536-8381 or reach us online.