The Cyber Insurance Landscape is Undergoing a Seismic Shift - It's Not Good News

Rising cyber security attacks have made cyber insurance firms increase premiums and tighten policy language, while at the same time, reducing coverage. This has left small to medium businesses (SMBs) that cannot afford these skyrocketing rates out in the cold when it comes to cyber insurance coverage, and therefore highly exposed to financial disaster when they experience an attack. Even with cyberattacks have increasing exponentially since the pandemic began, insurance firms saw a nearly 30% decrease in coverage from SMBs in 2021 due primarily to the rising policy cost. These SMBs are left vulnerable and in the opinion of Jamie Akhtar, CEO and co-founder of Cyber Smart, “the results could be catastrophic.”

Due to the increased insurance rates and limited coverage, SMBs must turn to cybersecurity technologies for more affordable and proactive options ways to combat bad actors. More and more security experts are advising companies to improve their cybersecurity practices to create true and sustainable cyber resilience in the face of these ever-increasing threats. Doing this not only decreases vulnerability to cyberattacks but can have a positive impact on the cyber insurance rates by proving that they are proactive in their approach to cybersecurity.

“Insurers have also changed tact and will only provide coverage to businesses that maintain a certain level of cyber security sophistication within their organizations.”

– Scott Connarty, general counsel at Adarma

There is an opportunity for businesses to be trailblazers and take advantage of cyber insurance firms’ changing strategies. This starts internally with proper staff education and training.

“Human error causes the majority of successful cyber attacks, but if your people aren’t aware of which behaviors are harmful or what to look out for, they’re much more likely to fall prey to threats.”

– Sam Soares, chief growth officer, CyberSmart

Here are a few considerations for businesses before embarking on building suitable cybersecurity measures:

1. Determine the most effective approach to managing risk within your organization and consider hiring or outsourcing a cybersecurity team capable of handling these risks.
2. Conduct a cybersecurity vulnerability assessment, an in-depth evaluation of all current systems and where they stand when it comes to security. A comprehensive evaluation is important because it allows organizations to identify how vulnerable they are to attacks and what are the high priority fixes to get in place immediately. It also offers them the opportunity to correct configuration mistakes or fix issues before they worsen.
3. Once you have identified the vulnerabilities within your infrastructure, it is important to determine appropriate responses for each vulnerability.
4. Design a cybersecurity roadmap with appropriate actions to take for the most pressing threats.

If SMBs present their cyber insurance provider with proof of their cyber risk awareness, the result could be a much more affordable insurance rate.

Contact Securus360 to schedule your vulnerability assessment and MXDR demo!