Simple Steps to Prepare for New Cyber Insurance Requirements

Cyber Insurance–or cyber liability insurance–companies are making some big changes. Due to the rise of cyber events, cyber insurers are reexamining their coverage policies. Don’t let these changes discourage you. The importance of cyber insurance shouldn’t be underestimated. Here are simple steps you can take to prepare:

Make sure you are covered:

Cyber insurance is intended to protect a business from financial losses brought by cyber security breaches. Cyber insurance is not usually part of a general business insurance policy, which is why it is important for businesses to ensure they are covered by a separate cyber insurance policy.

All businesses can get hacked, regardless of their size. It’s a common misconception that small and midsized businesses (SMBs) don’t get targeted. Cyber events against SMBs may not make it into the news, but they are still targets. In fact, small businesses are three times more likely to be targeted than larger businesses, according to a new report by Barracuda. Studies show that 43% of cyberattacks target small businesses and 61% of SMBs are the target of cyberattacks in 2021 alone.

Prepare to get/renew your policy:

Cyber insurance companies are reinforcing how businesses qualify due to pressures from ransomware risk escalating, increasing response and replacement costs, inadequate cybersecurity hygiene, lack of incident response plans, and business interruption. This is in response to growing losses incurred by cyber insurance companies processing insurance payouts for cyberattacks.

If a business is not prepared for a cyber event, a cyber insurance company will not underwrite the business. Not only are cyber insurance companies tightening the standards expected from a business regarding their cybersecurity, but they are denying coverage and policy renewals when requirements aren’t met.

After reviewing multiple cybersecurity insurance questionnaires, we noticed questions revolving around risk specific responses, staffing information, vendor management, inventory, encryption, security awareness, Multi Factor Authentication (MFA), antivirus, data backups, and patching. The focus is equal parts protection, detection, and response. These specific considerations are aligned with the cyber insurance requirements and may help reduce cyber risk.

In order to assess your qualification for cyber insurance policies, you can take an insurance questionnaire before officially applying. This allows businesses to implement changes to qualify for cyber insurance.

Seek help:

Businesses are responsible for their answers but should consult their IT department for an accurate evaluation of their cybersecurity. DDKinfotech works with our clients to prepare them to qualify for cyber insurance. If interested, we are offering a limited number of free cyber assessments and are happy to chat with you about your cyber insurance renewals. Fill out this form for a free cyber assessment.