Cyber Insurance 101: What You’ll Need Before You Apply
When we talk about IT security, we always begin from a place of proactivity and prevention. Nonetheless, disaster recovery and response remains a vital component of an IT strategy—and with data security incidents on the rise, the cyber insurance industry is proliferating at a parallel pace. For context, the cyber insurance industry is predicted to grow from 7.6 billion in 2021 to an astounding 36.85 billion 2028 according to Fortune Business Insights.
A 2021 study by the Canadian Internet Registration Authority [CIRA] cited that 60% of Canadian companies with more than 50 users currently have a cyber insurance policy in place. As applications for policies rise, so to do risk levels—causing insurance companies to become more and more diligent about who they’ll cover and what requirements must be met to do so.
What Does Cyber Liability Insurance Cover
There are hundreds of cyber liability insurance products on the market today. Generally, in the event of an incident, a policy will cover the following costs to some extent:
Incident Response — The costs incurred for accessing an incident response team directly after a cyber-crime takes place.
Legal Costs — Any costs incurred for legal advice, crisis management services, and credit monitoring.
System Restoration — Repairs to any software systems damaged due to the cyber crime.
Business Interruptions — Covers losses for business downtime resulting from the cyber attack.
The cost of insurance premiums for a cyber liability policy depend on many factors including what industry you’re in, the services you offer, the amount of client information you have stored in your database, what type of security systems you have in place, and the level of training your employees have received on cybersecurity.
Minimum Requirements for Cyber Insurance Policies
Unfortunately, qualifying for cyber insurance isn’t quite as easy as one might expect. The good news? If you’ve aligned your security policies with industry best practices, you may already have what it takes to qualify. While there’s no one-size-fits-all policy, insurers generally want to know you meet these minimum requirements:
1) Backup
In the event a cyber incident occurs, backup is critical in ensuring your organization can get up and running as quickly as possible, mitigating the costs to the insurer for business interruption.
2) Multi-Factor Authentication (MFA)
MFA is known to be a simple but extremely effective method, preventing up to 99% of malicious attempts to gain access to a network, says Microsoft.
3) Security Awareness Training
Because human error is attributed to 52% of security breaches, security awareness training for staff is a bare minimum requirement for insurers.
4) Proactive Patching Policies
Proactive patching is a simple but effective method to preventing cyber attacks, with 57% of victims reporting their breach could have been avoided by installing an available patch.
5) Incident Response Plans
Similar to having effective backup, maintaining a diligent incident response plan helps to ensure you are left in the lurch when an attack does take place. Instead, an IRP will provide clear direction on the steps needed to mitigate the attack and get you back up and running as quickly as possible.
In today’s world of work, many of these requirements are table stakes—but trust that your insurer will want proof that each of these requirements is regularly monitored and maintains a minimum standard.
Do you meet the minimum requirements for cyber insurance?
We can help you get there. IX Solutions helps ensure your business stays steps ahead of the threat landscape with proactive cyber-threat monitoring, detection, response, and remediation. With enterprise-grade security solutions, we optimize your security posture and shield your business from malicious attacks. You’ll be signing your security policy before you know it!
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