With one high-profile attack after the next making headlines in recent years, it’s clear we won’t see a decrease in threats any time soon. In fact, as the end of the year draws near, The Cybersecurity and Infrastructure Security Agency (CISA) and the Federal Bureau of Investigation (FBI) have warned that ransomware attacks will likely increase throughout the entire holiday season.
At the same time, new research indicates that ransomware costs are being cut significantly due to better preparedness. With several sanctions and policy bans implemented in recent months, cyber insurance claims have declined since earlier in the year. Still, organizations that aren’t keeping pace with security needs are paying more per breach incident, and the true costs of operating without cybersecurity insurance are more apparent than ever.
A Cost-Benefit Analysis of Cyber Insurance
The risk model for cyber insurance is quickly adjusting to align with the latest threat vectors, resulting in higher premiums and coverage reductions, along with scrutiny of risk profiles and detailed assessments. Cybersecurity insurance requirements are becoming more stringent and denials and claims are simultaneously rising. Still, though the costs of cyber insurance are becoming increasingly expensive for both insurer and the insured, doing nothing to prepare has far-reaching implications.
More for IT Providers
Organizations might assume that a cyber breach will cost less than adding additional cybersecurity protection, but they may not be considering the various repercussions that could cost their business. In addition to the ransom itself, the cost of a ransomware attack can include operational downtime, investigation and remediation costs, PR or crisis communication costs, reputational damage, and lost business. Organizations like MSPs and other IT Providers operating without cyber insurance can even invite legal action if something goes wrong.
Many businesses are looking to purchase breach insurance to help mitigate risks and meet business demands. Some face the possibility of losing an existing or prospective client if their cybersecurity posture is not strong enough. Operating without cyber insurance leaves a business open to the world of evolving threats and all the ripple effects that come along with a cyberattack. And even companies with cyber insurance need to ensure that their coverage is sufficient and covers their most significant potential risks.
Building a Comprehensive Cybersecurity Foundation
Preparedness is the central factor in the effectiveness of both cyber insurance and resilience against cyberattacks. Improving basic security fundamentals can lead to significant and immediate improvements. There are a few elements to build a comprehensive cybersecurity program that not only increases the chances your organization can secure cyber insurance coverage but protects your overall business.
Start with a risk assessment that determines your organization’s current security posture. This assessment will expose any areas of improvement to inform a plan that bolsters your cybersecurity. The subsequent plan should be holistic and include testing and assessments, policies and training, and detection and response.
Once the foundation is in place, find the coverage that best fits your organization’s needs. Not all cyber insurance plans are created equal, so ensure potential coverage matches the needs of your business. The job isn’t complete once you’ve secured coverage. Keep up the level of protection with continuous comprehensive cybersecurity – as threat actors continue to grow and evolve, we must too.
With comprehensive risk assessments and actionable recommendations for improving posture, Defendify can help clients adequately set themselves up for success when obtaining cyber insurance coverage. Start with our Cyber Insurance Readiness Checklist to identify the current state of your cybersecurity posture and build next steps to secure cyber insurance coverage.
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