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How to Combat the Rising Costs of Cybersecurity Insurance

By Elliot Anderson  |  March 23, 2023

Even though your business may have cybersecurity insurance, it doesn’t mean you can avoid the steps necessary to prevent bad things from happening. Similar to our own healthcare, it’s no secret that being diligent with preventative care and a consistent healthy lifestyle not only protects your health but also protects your pocketbook from more serious illness, no matter what kind of insurance you have. The same can be said for dental care and insurance. Just because you have insurance doesn’t mean you don’t brush your teeth.

Businesses across all sectors are starting to recognize the importance of cybersecurity insurance (also known as cyber risk insurance or cyber liability insurance), especially those companies that store financial, personal health, or other client data. Up until recently, many companies considered this insurance policy as enough protection against a breach. The truth is that insurance companies are not in the business of spending money. They make money and will not continue to cover those businesses that are costing them a payout. Or they will find another way to make it back, such as higher premiums and deductibles.

The increase in a remote workforce drew the attention of cyber criminals, and many companies have stated they were not prepared for a data breach caused by the remote workforce.

According to a report issued by Standard & Poor’s Corp., “Cyber insurance premiums, which now total about $5 billion annually, will increase 20% to 30% per year on average.” Most of this is due to increased claim frequency and the severity of the claims. One of the main reasons behind this is that SMB cyber investments have not kept up with the escalation in advanced persistent threats.

It’s become clear that businesses need to ensure they have the right IT infrastructure in place to provide the security necessary to not only predict and prevent threats, but also detect and respond to a data breach, ransomware, or other cyber attack. Optimally, a fully Managed Threat Protection solution can meet this need and more, which is a must-have for today’s mobile and remote workforce. Along with peace of mind, this protection also can lead to lower insurance rates due to prevention measures being implemented.

4 Steps to Combat Rising Costs of Cybersecurity Insurance:

  1. Implement an employee cybersecurity awareness training program
  2. Achieve and maintain IT security compliance requirements, which is the starting point, not the end goal of cybersecurity
  3. Adopt a Zero Trust approach to security
  4. Close security gaps by engaging a managed security service provider to help predict, prevent, detect, and respond to threats

Cybersecurity insurance is a key part of any business’ future protection against a breach. By predicting and preventing the breach before it happens, and having a plan to detect and respond when one occurs, you can save money and time, as well as reputational harm.

In Summary

In the past two years, cyber security insurance prices have increased 50% year over year. By ensuring organizations comply with even the most basic cybersecurity controls, providers can drastically reduce their exposure to risk. However, to be truly covered today, you have to prevent, detect, and respond to active threats and even predict future attacks before they happen.

Cyber insurance kicks in during post-breach – but what happens before? Preparing and shoring up your cybersecurity posture means investing in people, processes, and technology. Effective cybersecurity requires multiple layers of security controls and the right combination of technology and expertise. The good news is that you don’t have to do this alone. Netsurion offers powerful and practical cybersecurity with a defense-in-depth approach that considers every attack vector and attack surface within your IT infrastructure. This equals peace of mind before, and after a breach.

By Elliot Anderson
How to Combat the Rising Costs of Cybersecurity Insurance

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