Cybersecurity insurance is still a pretty new concept for many SMBs. It was initially introduced in the 1990s to provide coverage for large enterprises. It covered things like data processing errors and online media.
Cybersecurity insurance is still a pretty new concept for many SMBs. It was initially introduced in the 1990s to provide coverage for large enterprises. It covered things like data processing errors and online media.
Since that time, the policies for this type of liability coverage have changed. Today’s cyber insurance policies cover the typical costs of a data breach. Including remediating a malware infection or compromised account.
Cybersecurity insurance policies will cover the costs for things like:
Data breach volume and costs continue to rise and 2021 set a record for the most recorded data breaches on record. During the first quarter of 2022, breaches were up 14% over the prior year.
No one is safe. Even small businesses find they are targets. They often have more to lose than larger enterprises as well. About 60% of small businesses close down within 6 months of a cyber incident.
The increase in online danger and rising costs of a breach have led to changes in this type of insurance. The cybersecurity insurance industry is ever evolving. Businesses need to keep up with these trends to ensure they can stay protected.
Here are some of the cyber liability insurance trends you need to know about.
The average cost of a data breach is currently $4.35 million (global average). As these costs continue to balloon, so does the demand for cybersecurity insurance.
Companies of all types are realising that cyber insurance is critical. It’s as important as their business liability insurance. Without that protection, they can easily go under in the case of a single data breach.
With demand increasing, look for more availability of cybersecurity insurance. This also means more policy options, which is good for those seeking coverage.
With the increase in cyberattacks has come an increase in insurance payouts. Insurance companies are increasing premiums to keep up. In 2021, cyber insurance premiums rose by a staggering 74%.
The costs from litigation, ransomware payouts, and other remediation have driven this increase. Insurance providers aren’t willing to lose money on cybersecurity policies and thus, those policies are getting more expensive. This is at the same time as they are more necessary.
Certain types of coverage are getting more difficult to find. For example, some insurance providers are dropping coverage for “nation-state” attacks. These are attacks that come from a government.
Many governments have ties to known hacking groups. So, a ransomware attack that hits consumers and businesses can very well be in this category.
In 2021, 21% of nation-state attacks targeted consumers, and 79% targeted enterprises. So, if you see that an insurance policy excludes these types of attacks, be very wary.
Another type of attack payout that is being dropped from some policies is ransomware. Between Q1 and Q2 of 2022, ransomware attacks increased by 24%.
Insurance providers are tired of unsecured clients relying on them to pay the ransom. So many are excluding ransomware payouts from policies. This puts a bigger burden on organisations and they need to ensure their backup and recovery strategy is well planned.
Just because you want cybersecurity insurance, doesn’t mean you’ll qualify for it. Qualifications are becoming stiffer. Insurance providers aren’t willing to take chances especially on companies with poor cyber controls.
Some of the factors that insurance providers look at include:
You’ll often need to fill out a lengthy questionnaire when applying for insurance which includes several questions about your cybersecurity situation. It’s a good idea to have your IT provider help you with this.
This can seem like a lot of work that you have to do to qualify for cyber insurance. As you review the questions, your IT partner can identify security enhancements. Just like other forms of insurance, if you take steps to reduce risk, it can often reduce your premiums.
So, it pays to do a cybersecurity review before applying for cyber insurance. You can save yourself time and money. It can also fortify your defences against cyberattacks.
Cybersecurity coverage and insurance applications can be complex. If you answer wrong on a question, it can mean paying hundreds more in premiums than you should.
If you’re considering cybersecurity insurance, don’t go it alone. Give us a call and schedule a consultation. We can explain the policy details and provide guidance.
You need the best IT support. Technology is complicated and expensive. It’s so hard to maintain everything and know what to do when something breaks or goes wrong. IT problems can really put a damper on your day. They’re frustrating, time-consuming, and can seem like a never-ending cycle of issues.
Penntech IT Solutions, a UK-based IT Service provider, is available to solve your issues proactively and reactively. We offer a range of services that will best suit your business needs — whether you only need someone to manage your server or want an entire IT department on call, we provide it all.
We’re always just a phone call away, and we live and breathe IT services. We’re here to help your business with anything that could go wrong with your systems or devices. We’re ready to solve any problem you throw our way!
Contact us today or explore the range of support packages on offer.
Article used with permission from The Technology Press.
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