Tips to Lower Your Cyber Insurance Premium

Most businesses would have insurance policies safeguarding their assets to protect them from liability if anything happens to their staff and customers. However, these policies generally concentrate on the physical aspect and often fail to encompass the problem caused due to cyberattack. Cyber insurance is an insurance that specifically safeguards an organization from liability caused due to data breach or some other kind of cyber incident. Nowadays cyber insurance is more like purchasing health insurance; there is probability of lower rate if the company has good cybersecurity measures in place.

A sound cyber system is nowadays crucial to the insurance underwriting process. The cyber insurance industry was majorly concentrating on violations of data breach notification rules including GDPR. Most insurance providers don’t take the step to audit policyholders but insist on the latter managing their attack surface. With regard to developing an appropriate plan, organizational senior-level executives are taking steps to limit their attack surface. The need arises to consider a lot of variables when they actually devise the plan.

Costs of Insurance Premiums Increasing with the Costs of Ransomware Attacks

The cyber insurance market has seen a substantial surge in the last few years as a surge in high-price attacks has initiated several companies to want to nullify the potential costs to their business. And insurers are also keeping abreast of this transition (some insurers charge as high as 300% at renewal) and have adjusted their prices accordingly. Thus the cost of insurance premiums is rising with the cost of ransomware attacks. Added to that, the insurers are lowering coverage limits on sectors that have been worst hit by cyber crime. These sectors comprise education, government, healthcare, and manufacturing. According to recent reports, insurers who didn’t mind to issue $5 million cyber liabilities policies in 2020 have scaled back to limits of $1 million to $3 million in 2021, even on renewals. This move prompted organizations to seek additional insurers to reach desired cyber liability coverage limits.

What Insurers Expect from Companies Regarding Cyber Practices?

Insurers have the same anxiety as companies in losing money. They are attempting to scrutinize a company’s cyber practices before insuring them. They want to make sure that customers have devised strategies for multi-factor authentication (MFA), micro-segmentation, offline regular backups, end-of-life system management, staff training, incident response plan, etc. Especially, MFA has become mandatory to qualify for cyber coverage; it is one of the most effective means to prevent a cyber extortion attack. Failure to execute MFA raises the company’s risk level and subsequently premium rates. Besides, several insurers require Privileged Access Management (PAM) controls to safeguard privileged accounts. Least privilege controls may be needed to bolster ransomware defenses, safeguard sensitive data in cloud environments, and look into compliance concerns.

How can Companies Lower their Risks and Mitigate Cyber Insurance Premium?

Despite the growing premium hikes of cyber insurance and the need for a robust coverage, there are some best practices to decrease the company’s liability:

1: Use MFA

As discussed above, the instant way to make a drastic impact to your IT security posture is through MFA. This should be an integral part of a strong identity and Access Management (IAM) system. A good practice is to have a user and password management system based on a safe directory service including Microsoft Active Directory, with MFA mandatory, and even Privileged Access Management (PAM) layered on top to raise the security of critical systems. According to a research, users that enable MFA on their accounts can block to an extent of 99.99% of automated cybe attack attempts.

2: Adopt a Comprehensive Incident Response Plan

Cyber security has gone beyond a technical issue to a legal issue. In order to have cyber resilience, cyber insurance and insurance response plan are important. Forming an exhaustive and well-written incident response plan will help companies to demonstrate their cybersecurity preparedness. While framing the plan, steps should be taken to diligently document all of the security controls at practice. Making sure that your cyber insurance policy and Incident Response Plan work well is crucial.

3: Utilize Enterprise-level antivirus

While traditional antivirus cant totally secure your data and systems, enterprise-level, future-proof antivirus solutions provide the benefit of behavior analysis, artificial intelligence, live monitoring, machine learning etc. to detect threats.

4: Perform frequent penetration testing

Some insurance companies want the companies they insure to have frequent penetration testing and security audits. Checking the overall system for vulnerabilities, exposed endpoints, software faults, and needed updates is a good practice. This would lead to rapidly resolve any issues before any damage is done to the business. Through penetration tests, earlier breaches or attempts at attacking the network are generally identified.

5: Embrace a data recovery and backup solution

An exhaustive data backup and recovery solution will help in the progress of the company suppose the company data becomes corrupted due to a security event. Ransomware generally corrupts the production environment and backups. Proper controls are needed to make sure backups remain viable once a ransomware or malware attack hits. Backups should be carried out frequently, stored offsite, and tested regularly.

6: Protect your Network from Attacks

This concern is gaining more importance nowadays. The network edge is the place an enterprise network connects to a third-party network. Generally, this connection will be a WAN service provider at the WAN edge. It can even be an internet service provider at the internet edge. Since you are connecting your equipment to someone else’s, additional network edge security is needed to mitigate malicious activity from the external network getting into yours. To be precise, the Internet needs to be a trusted interface to connect to company resources as far as network edge security is concerned. Users need access to cloud and SaaS (software as a service) applications through the internet. This raises the security risk.

Several tools are there to secure your network edge. Though the network-based firewall is a common choice, tools like intrusion prevention system to monitor traffic to determine if any known malicious signatures are matched are emerging nowadays. Besides, there is also application-layers firewall that carries out deep packet inspection up to Layer 7 of the OSI model. This highest layer supports end-user applications and processes. Other network security tools including network-based malware protection, cloud-based threat intelligence, data loss protection and sandboxing services are also effective means to secure the network edge from advanced threats.

7: Assess the Vulnerability of IoT Devices

The IoT environment manages several heterogeneous devices, and these devices might be susceptible to cyberattacks. Smart devices, sensor nodes, and wearable devices that are utilized in the IoT domain are resource-constrained devices. The following may happen:
a) CIA (confidentiality, integrity, and availability) compromise if the network services are not safe enough on the IoT devices
b) A device and its associated components are affected if the web, cloud, and API are not secured
c) Absence of firmware validation on a device can result in CIA triad violation and non-compliance
d) Usage of insecure OS platforms and the usage of components from a compromised supply chain could make the device to be affected etc.
There should be steps taken to assess the vulnerability of IoT devices.

Cybersecurity insurance is a pivotal part of your insurance portfolio. You can always avoid the surging prices by implementing the best practices mentioned above. The main aim is to mitigate the probability of a cyberattack.