The new normal of hybrid work and other non-traditional work environments have only made it easier for cyber security threats to successfully damage company networks. Many organisations – from small businesses to large-scale conglomerates – have turned to purchasing cyber insurance to help mitigate the damages of cyber-attacks.
But in a time where data breaches can cost an average of $4.35 million, it is vital that business owners know what cyber insurance is and how premiums can be reduced to ensure that they have the best coverage possible.
What is cyber insurance?
A type of business insurance, cyber insurance refers to a formal policy that entitles business owners to a payment that can help them deal with the consequences of cyber incidents and events.
This can include payment for:
- Formal, forensic investigations into detrimental cyber events.
- Mitigation solutions.
- Data recovery solutions.
- Liability for third parties.
- Financial losses.
- Legal services.
- Public relations solutions.
Why are premiums rising for businesses?
As the world continues to grow more digital, cyber risks have become commonplace. Notably, throughout the days of the pandemic to today, companies and their staff shifted their operations to the online sphere – a space rife for business interruptions, including malicious actors.
Due to the unpredictable nature of cyber-attacks (and the increasing costs of their damages), insurers have been forced to rethink their processes and become more choosy about the claims they formalise.
To cut a long story short, firmer policies surrounding terms, conditions, and exclusions have resulted in insurance premiums increasing. Reportedly, the costs associated with “taking out cyber cover ha[s] doubled on average every year for the past three years”. While this may seem like a significant dent in your company’s budget, it is imperative to remember that insurance can play a critical role in your business’s recovery post a successful breach.
Is cyber insurance necessary for companies?
If you do not have cyber insurance, your organisation could be more vulnerable to the financial losses that come with security threats. Without the coverage afforded by cyber insurance, you may be unable to pay for the damages that are caused, potentially resulting in fines, penalties, and other legal actions leveled against you.
Simply put, insurance can help you protect your business’s operations, technology, and reputation. Without it, your company may not have the means to withstand the modern cyber threat landscape.
How can businesses reduce their cyber insurance premiums?
Reducing your premiums will allow you to save money and prove to your insurer that you are responsible. The easiest way to lower your premiums is by implementing the following cyber security solutions and measures in your company. These solutions can help safeguard your data and systems – the targets of cyber threats.
These solutions, practices, and measures are:
Adopting a password manager
Using the same password for numerous applications across the company is a common problem in the business landscape. Password managers are programs that act as vaults for storing and organising passwords within a central location.
A universal ‘master’ password is needed for individuals to access the vault. To make the most of a password manager, create strong, unique passwords and store them within the program.
Improve your company’s security culture with awareness training
Awareness training not only helps employees understand the risks and threats posed by cybercrime, it also teaches them how to protect themselves. By undertaking cyber security awareness training that is engaging and relevant, your employees will feel more confident in their security knowledge and will be dedicated to upholding high standards of cyber security excellence.
Create a high-quality disaster recovery plan
A disaster recovery plan (DRP) – a strategy (included within a business continuity plan) that outlines how a business will go about backing up its data and securing its technology assets – can save a company from significant data loss.
This is crucial for ensuring that operations can continue after a threat has occurred. If you are unable to develop a DRP on your own, a managed service provider (MSP) can offer you the resources and data experts you need to formulate a DRP.
Undertake regular security tests
Cyber security tests, such as penetration testing, are legitimate exercises that can analyse your business’s IT infrastructure and unearth its vulnerabilities. Conducted by cyber security professionals, routine security tests can keep updated on the status of your organisation’s network security, helping you fix weaknesses before they grow into full-scale problems.
Protect data with encryption
Data encryption can help businesses protect their data from being stolen or viewed by unauthorised entities. By encrypting company data (such as your customer’s personal information, budgeting numbers, employee credentials, etc.), the data becomes unreadable to anyone who does not have the proper resources to view it. Data encryption works best when data is stored in a secure location and is scrambled before and during transit.
Reduce your cyber insurance, deploy cyber security solutions, and revolutionise your business
Cyber-attacks are a significant risk that businesses face. From disorientating networks to reputational damage, cyber security breaches can affect businesses of any size and in any corner of the world. As such, it is vital for business owners to invest in insurance that can help protect them from the financial losses that cybercrime leaves behind.
The cyber security experts at Muscatech specialise in all aspects of cyber security, from investigating insurance premiums to implementing security solutions that safeguard vital workplace information and systems. Do you need cyber insurance but are unsure of where to start? Talk to the Muscatech team today.
