Cybersecurity Insurance:
What Businesses Need to Know
Cybersecurity is becoming an increasingly important part of businesses, irrespective of their scale. According to a 2022 IBM report, the average cost of a data breach is $9.4 million. So, while one might think that a small business isn’t likely to be the focus of an attack, that would be far from the reality. Small businesses are equally likely to be the subject of an attack and in some cases, due to their limited budgets and investments in security, they are likely to be even more susceptible than a larger organization.
Businesses (big and small) need to protect themselves with cybersecurity insurance.
This provides financial protection to companies in the event that their systems are compromised. Insurance carriers are more stringent now, than ever, about making sure that it’s clients are following standard security processes. After all, insurance companies do not want to insure organizations that are negligent about their security protocols.
How Much Does a Cybersecurity Insurance Cost?
The amount depends on what will be covered under the insurance, the scale of the infrastructure, and the security policies and controls that exist within the environment. Policies can be a few hundred through several thousand dollars per month for coverage.
Regardless of cost, it is critical to have a conversation with your agent to understand what will and won’t be covered by a policy.
Types of Cybersecurity Insurance
● Cyber Liability Insurance: This type of insurance generally covers a business’s liability for a data breach in which the customer’s personal information, such as Social Security or credit card numbers, is exposed or stolen. It can also cover liability arising from website media content, as well as property exposures from business interruption, data loss/destruction, computer fraud, funds transfer loss, and cyber extortion.
● Cyber Breach Insurance: This term is less standard in the industry but is often used to specifically refer to insurance policies that cover the costs associated with the aftermath of a cyber breach. This can include the costs of notification, identity protection solutions for those affected by the breach, public relations efforts to mitigate damage to the company’s reputation, and legal fees associated with any lawsuits that arise as a result of the breach.
These are the 2 broad types of insurance, but there are several others, including coverage for theft/damage of IT hardware equipment, cyberbullying, ransomware attacks, software replacement, and more.
What Do You Need to Obtain Cybersecurity Insurance?
Business owners should implement, or engage the services of an I.T. firm to implement security policies and controls in an effort to ensure that a carrier is willing to underwrite a policy for them.
Additionally, a disaster prevention plan should be developed, that is tested regularly to allow the business to get back to a functional state in the event of a compromise.
Some important security items include but are not limited to:
● Enterprise-Grade Email Security: This would involve the company having an email security tool that can automatically detect and prevent common threats before they reach the employee’s mail. These tools also come with security awareness and training programs from which the employees can benefit.
● Data Loss Protection: The company must ensure that it has taken sufficient measures to protect data loss. These measures can include hardening the infrastructure security, conducting regular audits through penetration testing and other tests, and more.
● Multi-Factor Authentication: Logins and passwords must be protected with multi-factor authentication to prevent malicious attackers from gaining access through brute-force techniques.
● Next-Gen Firewalls: The conventional firewalls are outdated and can easily be bypassed. Thus, it is important to have next-generation solutions to protect your organization’s data and infrastructure.
With these in place, it will be easier for your organization to acquire a cybersecurity policy.
Remember, an ounce of prevention is worth a pound of cure!
If you need any guidance with implementing the necessary security and backup measures in your business, email us at support@otoit.com and we will assist you as soon as possible!