The average cost of a data breach last year was $4.35 million, according to IBM’s Cost of a Data Breach Report 2022. How do you safeguard your company from a catastrophe and its aftermath like that?
You can purchase cyber insurance. This type of insurance also referred to as cyber liability insurance, shields businesses from the effects of online threats and attacks. By getting cyber insurance protection, you can minimize the impact of cyberattacks on your company’s operations while also paying for the costs associated with defending against and recovering from them. However, keep in mind that in order for your company to be eligible, some IT requirements must be met.
What is Cybersecurity Insurance?
Cyber insurance offers a defense against dangers associated with losses involving a company’s digital assets. This can involve losing business data to ransomware, losing time or output while an attacker damages the network infrastructure, or losing or compromising consumer personal identification information (PII) data.
By encouraging the adoption of improved procedures, cyber insurance enhances the level of cybersecurity. A certain level of security will be required by insurers as a condition of coverage, and businesses that employ superior security procedures normally pay lower insurance premiums.
Cyber insurance is extremely helpful in the event of a serious security issue. Insurance offers a smooth means of funding recovery from significant losses, assisting businesses in getting back to business as usual, and lowering the need for government aid.
Last but not least, insurance enables the equitable distribution of cybersecurity risks, with higher premiums for businesses whose estimated loss from such risks is greater. This prevents both freeriding and potentially hazardous risk concentration.
Key Cybersecurity Requirements for Cyber Insurability
Having cybersecurity insurance can assist with some of the costs associated with recovering from a cybersecurity event when a company or organization becomes a victim. Let’s look at some of the common cybersecurity safety measures that insurers of cybersecurity insurance need.
Looking for a new policy? Need to renew your cyber insurance? It may become more challenging due to certain trends. A proactive security approach is replacing a reactive one in the cyber insurance sector. Many insurers now mandate the use of a SIEM (security information and event management) in addition to MFA, EDR, and other controls. As more attackers target SMBs and MSPs in supply chain hacks, cyber insurance costs are rising and even tripling. Insurance claims for ransomware demand more stringent security measures.
Security Audit
Some insurance companies require businesses to undergo regular penetration tests and security audits, which must be carried out by firms other than those offering cyber/network security as a managed service. If you are managing things internally, this naturally means outsourcing your security audits and penetration testing to a third-party company.
Multi-Factor Authentication (MFA)
In order to access a resource, the user must present two or more verification factors. Identity and access management policies must include MFA as a fundamental element. In the event that credentials are stolen, it adds another authentication requirement.
Patch Management and Vulnerability Management
Cybercriminals have access to vulnerable software and apps. Closing these open gateways and reducing risk requires a solid patch management strategy and cadence.
Endpoint Detection and Response (EDR)
This integrated endpoint security solution combines continuous real-time monitoring and data collecting from endpoints with automated rules-based analysis and response capabilities. Cyber threats can be protected from and detected by EDR systems before they result in an incident. Modern anti-virus software is no longer seen as necessary.
As cyberattacks become more frequent and expensive, underwriters are demanding evidence that businesses have strong defenses in place.
Email Filtering and Web Security
Email filtering services sift through both incoming and outgoing email traffic for a company. Email sent to users is scanned by inbound email filtering, which then divides the messages into many groups. Spam, malware, viruses, dubious links, and others are examples of this, but they are not the only ones. A similar method is used in outbound email filtering to examine user-submitted communications before sending any potentially hazardous messages to other organizations. Web security solutions are primarily concerned with protecting web surfing behaviors that could expose workers to a variety of dangers, such as phishing websites, credential compromise, and harmful downloads. These solutions are crucial because human mistake actually causes a lot of cyber problems to start off.
Privileged Access Management (PAM)
An organization’s vital information and resources are secured, controlled, and monitored using a combination of methods and technology. Since privileged user accounts frequently have high-level rights, access to sensitive data, and the power to modify settings, they are important targets for attack. The activities of the organization could suffer severe harm if compromised. To safeguard your organization, it’s crucial to have the appropriate tools for managing and defending these accesses.
Cybersecurity Awareness Training and Phish Testing
By running systematic security awareness training, employees understand what common attacks look like and what they should do to protect their organization. For some companies who are pursuing a standard, security awareness training is also required for the organization to align to certain compliance frameworks, such as NIST, SOC, ISO, etc.
It’s impossible to prevent phishing attacks by purely implementing technical controls. It cannot be emphasized how crucial it is to regularly train and test staff members to identify these hazards given that phishing assaults account for over 85% of cyber incidents. Phishing awareness training starts with educating your employees on why phishing is harmful and empowering them to detect and report phishing attempts. Phishing awareness training educates employees on how to spot and report suspected phishing attempts, to protect themselves and the company from cybercriminals, hackers, and other bad actors. Simulated phishing campaigns reinforce employee training, and help you understand your own risk, and improve workforce resilience—these can take many forms, such as mass phishing, spear phishing, and whaling. You can also use the results to track the progress of your phishing awareness program and document improvements.
Secure, encrypted, and tested backups
The effectiveness of a company’s data backup procedures will determine its capacity to continue operating after an incident. The resilience of an organization depends on having three different copies of its data on two different media, such as the cloud and external drives, with one copy offsite and one copy offline (not connected to the network). Verifying the backups to make sure there are no errors following data recovery is an essential component of the aforementioned data backup best practices.
Incident Response Planning and Testing
Again, having a plan and regularly testing it is essential to an organization’s ability to recover from the worst-case scenario.
We have encountered a number of common cybersecurity requirements, but they are only a handful. Depending on the underwriter for cyber insurance, there can be others.
As we just indicated, the cybersecurity precautions that cyber insurance providers will demand will change as the cybersecurity threat landscape does.
