Cyber Insurance

February 15, 2023Homefield IT

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The chances of your business being hit by a cyberattack are pretty high in 2023. Researchers found that ransomware attacks alone increased by 150% in 2020 and things haven’t gotten any better in the last couple of years.

What this means is that it’s no longer enough to rely on cybersecurity to protect your business. You need something in place to help ensure your business doesn’t suffer and that your customers can continue to trust your organization. This can be hard in the aftermath of a cyber incident, but the good news is that cyber insurance can help.

What is cyber insurance?

Cyber insurance is exactly what it sounds like, insurance that’s designed to cover your business and your customers in the event of a cyber incident. Cyber insurance covers your assets, helps you respond to breaches and other attacks, and helps you inform customers when there’s been an attack.

Why is it important?

Like a lot of insurance, cyber insurance helps your business mitigate the impacts of a cyberattack on your business. Rather than your business being on the hook for the financial aspects of an attack, like regulatory fines and repairing the damage, you have insurance that helps. Not only that but you’re covered if customers sue because their personally identifiable information (PII) is compromised.

On top of that, cyber insurance companies often help you inform customers of the incident. They can even help find a PR firm to help with reputation management after an attack, as well. This provides you with a way to proactively manage the potential damage to your business.

Beyond covering your business in the event of an attack, there are certain requirements for cyber insurance. Companies often won’t cover you unless you have certain security features in place, like MFA and backups. This means that along with being there once something happens, just getting cyber insurance means that you improve the overall security of your business.

What should be your plan in 2023?

If you don’t have cyber insurance in 2023, this is the year to get it. Be prepared, though, because as hinted at above, getting coverage means that you have to improve the overall security of your business.

The best approach, should you plan to get insurance this year, is to reach out to a company and learn what you need to do in order to qualify. The process will likely be long, as insurance companies are getting more strict about what they require, but it will be worth it to have that extra layer of protection for both your business and your customers.

You should also determine what kind of insurance your business needs. There are a few different types, like cyber liability and cyber breach insurance, and while both offer coverage, they vary slightly. Speaking to an insurance company can help you figure out what the best option for your organization is.

Renewals assistance

Unlike other forms of insurance, the renewal process for cyber insurance isn’t just a matter of calling your agent and re-upping for another year. General advice is that you need to start well in advance of your renewal date. It can’t hurt to reach out six months ahead of time. You need to do this because you and the insurance company are going to go through your security to see what needs to be upgraded based on changes made since you first got your policy.

Even if you’re already a customer, you still need to meet those basic requirements to protect your business as much as possible. Without this, you’re too much of a liability as you’re knowingly leaving security holes in your systems. This process can take months because, as we mentioned above, insurers are getting more strict about their requirements.

This process can be further complicated if you’ve had a recent (or not-so-recent) cyber incident. In cases like this, you’re likely going to have to show that you’ve gone above and beyond to fix the issues that led to the breach to prevent something like that from happening again.

Regardless of everything, it helps to work with professionals who can guide you through this, like a cyber security attorney or a managed services provider. They can help you better navigate everything and ensure that you have enough time to implement any changes that are required.

Benefits of having cyber insurance

The obvious advantage is that you have additional coverage in case of a security incident. Beyond that, however, cyber insurance brings additional tools and services to the table that you might not expect.

• Threat scoring and analytics – Insurers often provide reports to help you better understand how effective your cybersecurity is. You gain a sense of where the industry is as a whole and how your business stacks up. This gives you something to work towards, if you need to improve, or something to talk about in your marketing efforts if you’re doing well.

• Tools and services – You can gain access to the tools and services your insurer uses to get additional protection for your business. This could include things like ransomware protection or employee training (to help prevent phishing).
• Global expertise – Insurers are often large organizations that have experience helping companies around the world. This means that you’re not getting a single perspective on security, you’re getting a view that is informed by what’s happening everywhere. This can be helpful when you’re expanding into new regions and simply be better prepared against upcoming (or unusual) attacks.

Ultimately, what you end up with is a partnership that provides more comprehensive protection for your business. Similar to working with an MSP, you’re gaining access to a deeper pool of knowledge than you might otherwise, with insight into trends and access to tools that can keep you ahead of any possible threats to your business.

Want to learn more about cyber insurance?

If you’d like to learn more about protecting your business with cyber insurance or need help getting your business up to snuff for your insurer, let’s talk. Our cybersecurity experts can help. Contact us today to learn more.