Cyber attacks are on the rise as hackers and criminals constantly find new ways to exploit data and digital weaknesses. A recent Marsh and Microsoft study found that 75% of surveyed cyber-risk leaders said their company had at least one cyber attack over the past 12 months. That same study also found that only 19% of those security leaders felt confident in their ability to respond to a cyber attack.
Cyber Insurance is a critical piece of the puzzle in defending against the constant threat of ransomware, data breaches, and other digital attacks. Cyber insurance policies usually include coverage for costs like security and legal incident response, systems restoration, business interruption, customer notification, and ransom payments. However, it’s important to remember that coverage and cost vary based on the unique needs of each business.
Cyber Insurance Can Encourage Best Practices
The Marsh and Microsoft’s study noted that underwriting requirements from cyber insurers could provide an essential framework for organizations looking to step up their cyber security. Insurance companies will ask in-depth questions about policies and procedures, past incidents, and potential risks. These necessary inquiries can help guide companies to see where they may have security weaknesses.
The report stated that “…the adoption of certain controls has become a minimum requirement for a majority of insurers, with organizations’ potential insurability on the line.” Therefore, companies must adhere to insurance companies’ guidelines and requirements if they want to leverage the protection that cyber insurance can offer.
Cyber Insurance is Part of a Multi-Faceted Security Approach
Having a cyber insurance policy doesn’t mean organizations can get too comfortable. It’s important to have ongoing conversations about security and frequent digital safety audits. With cyber security threats shifting daily, companies must continually enhance and evaluate their IT and data security policies.
A report by Fortified Health Security stated, “Having cyber insurance doesn’t take the place of a strong cybersecurity infrastructure. Increasingly sophisticated attacks continue with larger payouts…”. It’s important to understand your cyber insurance policy and requirements as many carriers require specific minimum security standards or formal procedures. Adhering to a rigorous security framework will only benefit companies in the long run.
Cyber Security Threats are Dynamic
Some experts estimate that by 2025, the total global economic loss due to cybercrime will be $10.5 trillion. Therefore, cyber insurance is a key defense against these attacks, and companies and security leaders must also be aware of new and evolving threats.
Ransomware is considered to be the top cyber security threat, and it’s estimated that a ransomware attack occurs once every 11 seconds. Furthermore, ransomware criminals are becoming increasingly sophisticated as ransom payouts rise, some in the tens or hundreds of millions.
Security breaches in supply chain and infrastructure are also on the rise, as criminals know that a supply chain stoppage can have a devastating ripple effect. As a result, healthcare systems, food supply companies, energy providers, and other companies that provide critical services are high-value targets for breaches and ransomware.
Learn More about Cyber Insurance
If you want to learn more about how cyber insurance could enhance your security stance, reach out to the eSpecialty team.