October 9, 2024
Cyber insurance is a critical safety net for businesses and a fast-growing international market. According to Munich RE, a German multinational insurance company, the global cyber insurance market reached $14 billion in 2023 and is estimated to reach $29 billion by 2027. This increase is directly related to the increased frequency and sophistication of cyber attacks as well as their financial repercussions. For businesses, getting the right coverage at an affordable price depends on many key factors. Insurers are now closely examining the strength of your security measures before approving coverage—and potentially offering discounts for businesses that meet certain standards.
Coalition’s 2024 Cyber Claims Report found that the overall frequency of cyber insurance claims was up 13% year over year and the severity of claims increased 10%. Insurance companies want to ensure you have the proper defenses in place before offering coverage. This means businesses with stronger cybersecurity postures may receive better terms, while those with weaker protections may face higher premiums or even rejection. Key security factors like network security controls, multi-factor authentication (MFA), and vulnerability assessments are becoming increasingly important in the approval process.
The first step in strengthening your cyber insurance application is making sure you have proper network security controls in place. These include firewalls, encryption, and intrusion detection systems that help block unauthorized access and protect sensitive data. Insurers will want to see that your company has taken the necessary precautions to secure its network and minimize the chances of a breach.
Multi-factor authentication (MFA) is a simple but powerful security tool that requires users to verify their identity in multiple ways before accessing sensitive systems. By requiring a second form of identification, like a code sent to a phone or an authentication app, MFA reduces the risk of hackers breaking into your systems. Insurance providers often look favorably on businesses that use MFA as part of their security strategy.
Having a clear incident response plan and disaster recovery strategy is crucial for handling cyberattacks effectively. An incident response plan outlines how your business will respond to a security breach, including notifying affected parties and restoring normal operations. Disaster recovery plans focus on getting your systems back up and running after an attack. Insurance companies will check if your business has these plans in place to limit potential damage and reduce risks.
Conducting regular vulnerability assessments and patch management is critical to staying ahead of evolving cyber threats. Vulnerability assessments help identify weaknesses in your systems, while patch management ensures that all software is updated to fix known issues. Insurers prefer businesses that regularly test for and address vulnerabilities, as this shows a proactive approach to preventing attacks.
Cybersecurity isn’t just about technology; your employees also play a big role in keeping your business safe. According to IBM’s 2024 Cost of a Data Breach report, employee training is the number one factor in reducing the average cost of a breach. Training staff to recognize phishing emails and social engineering attacks can reduce the risk of falling victim to these common threats. Insurance providers will want to know that your team is prepared to spot suspicious activity and act accordingly to prevent data breaches.
Meeting compliance and industry standards like CIS or NIST show insurers that your business is following best practices for data protection. These standards set benchmarks for the level of security businesses should maintain. Aligning with them not only boosts your eligibility for cyber insurance but also reassures insurance companies that you take security seriously.
Dewpoint offers comprehensive IT security assessments that can help businesses prepare for cyber insurance eligibility. By reviewing your current security measures, Dewpoint can identify gaps in your defenses and recommend improvements. Whether it’s bolstering your network security controls, implementing MFA, or creating an incident response plan, Dewpoint’s team of experts can help your company improve its security posture, making you more eligible for coverage and potentially lowering your premiums. Schedule a conversation today.
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Dewpoint, an award-winning, Michigan-based technology firm, has been helping businesses prepare for, stay ahead of, and respond to IT challenges for over 27 years. From IT security to infrastructure management to automation, cloud migration, and beyond, Dewpoint has long been a trusted technology resource for businesses.
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