As headlines continue to be dominated by major hacking scandals, the alarming truth is that cybercrime is rapidly increasing. With the widespread digitalization and significant advancements in network technology, our reliance on devices has reached unprecedented levels.
Unfortunately, this dependency has also provided criminals with an expanding array of endpoints to exploit. The situation has become dire, with hacking offences surging by over 100% in the year ending March 2022, as compared to the same period in 2020.
In the midst of this escalating threat landscape, individuals and organizations find themselves vulnerable to cyberattacks to cyberattacks on an unprecedented scale.
From high-profile data breaches affecting millions to ransomware attacks paralyzing critical infrastructure, the repercussions of such incidents are far-reaching and financially devastating.
The urgency to protect sensitive information and digital assets has never been more apparent.
But, What’s the Solution?
Amidst this backdrop, cyber insurance has emerged as a potential safeguard against the financial repercussions of a cyberattack. However, navigating the complex landscape of cyber insurance is no easy feat.
The rising tide of cybercrime has led to a corresponding increase in insurance premiums, leaving many individuals and businesses grappling with the question – Is the cost of cyber insurance truly worth it?
Here’s the Answer…
To answer this question, it becomes crucial to delve into the intricacies of cyber insurance policies, examining their coverage, exclusions, and limitations. Moreover, it is essential to evaluate the potential financial impact of a cyberattack and weigh it against the cost of insurance premiums.
With the stakes higher than ever, making an informed decision about cyber insurance is paramount to mitigating the risks posed by cybercrime.
In this blog, we will dissect the current cyber threat landscape, exploring notable hacking scandals and their widespread implications. We’ll delve into the factors contributing to the exponential rise in cybercrime and the vulnerabilities created by our digital dependency.
Join us as we navigate the turbulent waters of cybercrime and cyber insurance, seeking answers to the pressing questions – IS BEING CYBER INSURED WORTH THE RISING COST?
Who Qualifies for Cyber Insurance?
Obtaining insurance has become progressively more difficult in all areas. Not only are prices rising, but there are also stricter underwriting criteria and increased focus on risk management and the maturity of security programs.
Hence, businesses must demonstrate robust security measures to qualify for cyber insurance. Although the specific criteria for cyber insurance may differ based on industry, insurer, business size, and coverage need – there are certain universally required security measures that every business seeking insurance must implement.
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Endpoint Detection and Response (EDR)
As the number of endpoints, such as laptops, mobile phones, and tablets, continues to increase, so do the potential entry points for cybercriminals.
EDR is an essential requirement for businesses seeking insurance, as it enables monitoring, discovery, investigation, and response to threats across the network of endpoint devices.
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Multi-Factor Authentication (MFA)
MFA has become a standard practice in daily business operations and is now a mandatory requirement for insurers. Implementing MFA for business networks, emails, and applications adds an extra layer of security.
As cyber-attacks advance, relying on a single data backup is no longer sufficient. Insurers now require businesses to have multiple backups in different locations to mitigate the risk of data loss.
Even the most robust cybersecurity measures can be undermined by human error. Insurers expect businesses to provide regular training and assessments to employees to enhance awareness and minimize the risk of social engineering attacks.
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Penetration and Stress Testing
In addition to employee training, insurers also require evidence that a business’s cybersecurity tools can effectively withstand threats.
Sharing the results of penetration and stress tests can help alleviate concerns regarding the level of protection in place.
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Zero Trust Network Access (ZTNA)
Although not yet a universally adopted security measure, ZTNA is gaining popularity as a reliable choice for secure network access, replacing outdated VPNs.
While not all insurers may currently require ZTNA, it is likely to become a future requirement due to its enhanced security capabilities.
While implementing the aforementioned security measures can enhance the eligibility for cyber insurance, it’s important to note that specific requirements will vary depending on the individual case.
Moreover, apart from insurance criteria, certain industries have their own regulatory obligations, such as the Telecommunications (Security) Act (TSA) for Network Operators.
It is crucial for businesses to comply with government legislation, as insurance companies are unlikely to accept those that fail to meet these requirements.
By aligning with both insurance criteria and regulatory obligations, organizations can better protect themselves and improve their chances of securing insurance coverage.
Is Cyber Insurance Really Worth It?
Determining the value of cyber insurance is not a straightforward matter with a simple “yes” or “no” answer. It heavily depends on the specifics of the individual policy, necessitating a thorough examination of coverage details, contractual stipulations, limits, and premium costs.
One important factor to consider is that certain insurers may require selecting the investigating company in the event of a breach. While this may not appear significant initially, it becomes more problematic when coupled with recent exceptions related to state-sponsored attacks.
Insurance companies are granted the authority to determine whether a breach is linked to a nation-state, potentially impacting the eligibility of the claim.
Hence, a careful evaluation of the policy terms and conditions, including the potential implications of state-sponsored attack exemptions, is crucial in assessing the worth of cyber insurance.
Organizations must consider whether they are comfortable relying on an insurer’s investigation results when it comes to breach incidents, especially if they have their own means of investigation or existing partnerships with remediation companies.
This raises concerns about the value of cyber insurance. However, what is undoubtedly valuable is maintaining a high level of cyber security that eliminates doubts about insurance eligibility.
As the threat landscape expands, businesses should stay vigilant, adapt security measures accordingly, and safeguard themselves, their partners, and their customers. Even though insurance requirements should not be the sole basis for an organization’s security, the higher standards being set indicate that there is a need to reassess protection levels.
The Bottom Line
The decision to obtain cyber insurance ultimately depends on factors such as policy cost, coverage level, and specific stipulations or exemptions. However, regardless of insurance coverage, prioritizing cybersecurity requirements from both insurance companies and government regulations is crucial.
Adhering to security guidelines like cyber essential and cyber essentials plus can enhance your security posture, while regular testing of cyber defences helps identify areas that require improvement.
This not only increases eligibility for cyber insurance and potentially lowers premiums but also significantly reduces the likelihood of successful breaches.
Remember, Cybersecurity insurance provides a safety net for businesses in today’s digital landscape, offering financial protection and peace of mind against the rising threats of cyber-attacks. It acts as a crucial layer of defence, reinforcing a comprehensive cybersecurity strategy and mitigating potential financial losses.
So, don’t miss a minute anymore – get in touch with your cyber insurance company and secure your business today.
