The number and rate of cyberattacks are on the rise, making cyber insurance a mandatory need and not just a backup policy that’s nice to have. However, qualifying for cyber insurance has recently become more challenging due to increasingly strict standards. Maintaining IT compliance with cyber insurance standards involves meeting many requirements.
Not only is it more difficult to qualify for cyber insurance than before, but it’s also more expensive. The frequency of cyberattacks and the damage they cause have prompted cyber insurance companies to offer less coverage at higher rates.
As an organization leader, it’s essential that you obtain the appropriate cyber insurance coverage for your organization. Here’s why cyber insurance is critically important and how the process of applying for cyber insurance works.
Why You Need Cyber Insurance
Just how expensive is a cyberattack? The answer always varies depending on the organization and severity of the breach, but the average numbers are staggering. According to Statista, the average cost of a cyberattack in the US in 2022 was $9.44 million. Just notifying customers that there was a data breach and other post-breach responses costs on average, $1.72 million, according to a 2016 Ponemon Institute study. Without cyber insurance, your organization is solely responsible for those costs.
Any business, large or small, can be a target of a cyberattack. A proactive approach to cybersecurity will protect your organization and can reduce costs if a cyberattack does occur.
Cyber insurance can protect your organization in the case of:
- lost devices
- lost data on your network
- lost data on other networks
- network security breaches
- notification requirements
- forensics requirements
- terrorist acts
Some policies also include coverage of legal fees in case of a lawsuit or regulatory investigation. The FTC recommends that you look for an insurer with a “duty to defend” clause.
If your business operates within a sector that demands strict adherence to cybersecurity standards, you must invest in the appropriate cybersecurity framework.
Maintaining cybersecurity compliance requires considerable planning and implementation. Doing so can also potentially qualify your organization for more favorable cyber insurance rates. Our team at AGJ is here to guide you through every phase of this intricate process.
While meeting certain advanced cybersecurity standards is not presently a contractual obligation, it might become so after regulatory adjustments. It's crucial that your business stays compliant with current standards and is also primed for any forthcoming changes.
IT Compliance and Cyber Insurance Applications
Cyber insurance applications are long and require detailed information about your cybersecurity practices. These underwriters need to verify that your organization meets their IT compliance standards. Some applications have hundreds of questions and require in-depth information about your IT consultant.
Cyber insurance applications typically ask for:
- your revenue
- information about your paper and electronic records
- information about any biological data you collect (such as fingerprints)
- questions about credit card transactions if you collect credit card data from customers
- information about your IT consultant or IT department
- questions about your email security controls, internal security controls, backup and recovery policies, phishing controls and loss history
Because of the sheer amount of information included in a cyber insurance application, the approval process typically takes a long time. Then once the cyber insurer has reviewed your policy, you might be required to implement further cybersecurity practices using additional tools. You might find yourself needing to work with multiple vendors to achieve IT compliance and qualify for cyber insurance.
Simplify Your Cyber Insurance Process
The process of qualifying for cyber insurance and maintaining compliance with insurance standards is daunting. Adhering to the correct cybersecurity frameworks, running the right audits and maintaining the correct controls require expert planning and execution.
Our team at AGJ can provide the expert guidance your business needs to give you the best chance at qualifying for and maintaining cyber insurance coverage. As the number #1 rated MSP in Mississippi, we understand the challenges your business faces and we can help you overcome them. With over 20 years of experience, we are the IT consultant team that knows what it takes to elevate your network security. We’re here to give you the best chance of qualifying for critically important cyber insurance.