Tag Archive for: cyber insurance

How to Choose a Cyber Insurance Policy

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A cybersecurity breach can be detrimental to a small business. In fact, according to the National Cyber Security Alliance, 60% of small businesses that are targets of a cyberattack close within six months.

In their 2021 report, the Government Accountability Office found that more insurance clients are opting-in for cyber coverage—up from 26% in 2016 to 47% in 2020. At the same time, U.S. insurance entities saw the costs of cyberattacks nearly double between 2016 and 2019.

There are some important factors to consider when choosing the right cyber insurance for your business. Consider these variables so you are sure you acquire the right coverage for you.

What is Cyber Insurance?

Cyber insurance, also called cyber security or cyber liability insurance, covers businesses against losses resulting from data breaches. This form of insurance primarily applies to businesses that run secure networks as part of their daily operations.

A cyber attack on a business without cyber insurance may result in legal fees, compromised data, and the loss of computer systems. 42% of small businesses have experienced a cyberattack within the past year and 53% have experienced multiple data breaches. 

What Do Most Cyber Insurance Policies Cover?

Coverage varies depending on the policy. However, cyber insurance generally covers: 

  • Fines, legal fees, and penalties
  • Credit and fraud monitoring services
  • Finding and addressing the security defect
  • Notifying customers of a data breach
  • Restoring the personal identities of affected customers
  • Recovering compromised data
  • Repairing damaged computer systems

What Do Most Cyber Insurance Policies Not Cover?

Cyber insurance is a must for anyone depending on a digital infrastructure to run their business. These coverage policies help protect businesses against the financial devastation of a cyber attack.

What Happens to My Business If I Don’t Have Cyber Insurance?

A cyber attack on a business without cyber insurance can result in the loss of hundreds of thousands of dollars between:

  • Various legal fees and fines
  • Recovery of compromised data
  • Damaged computer systems, and
  • Other necessary costs

The average small business pays $690,000 to recover from a cyber-attack. Middle-market companies can pay upward of $1 million.

How To Choose the Best Cyber Insurance Policy For Your Business

Choosing the right policy, like choosing your car insurance or health insurance, will depend on your company’s size and your industry’s threat levels.

First, Make a List of What You Want Covered

There are many reimbursable expenses that these insurance policies can cover, such as:

  • Investigations into the Cause of the Breach
  • Business Losses Arising from the Breach
  • Privacy Protection and Breach Notification
  • Lawsuits and Extortion

We recommend deciding which –if not all– of these expenses you want covered in your insurance. Your broker can also be a valuable asset in explaining what can be covered while you are selecting your policy.

Take a Look at Deductibles

Just like any other insurance policy, cyber insurance will have deductibles. Be sure to compare deductibles closely among insurers, just like you do with health, vehicle, and facility policies.

Understand if the Policy is a Stand-Alone Policy or an Add-On

Your existing insurance provider may offer cyber risk insurance as an add-on to your current policy. However, a stand-alone policy will provide more comprehensive coverage than add-on policies.

Does the Policy Cover Accidental Actions?

For business owners looking into purchasing cyber insurance, it is important to choose a policy that covers unintentional employee actions. Why? Employees often inadvertently cause cyber breaches and attacks. This can happen through staff responding to a phishing email, clicking an infected attachment or visiting the wrong website. 

While not all cyber attacks are a result of these actions, these mistakes are still common and can happen quickly and often to almost any member of staff.

The good news? Your business may be eligible for a discount for employing preventative measures –such as a cyber security training course for staff – to reduce the risk of a cyber attack.

Understand Your Third-party Risk

According to TechTarget, “ risk extends beyond traditional technology perimeters. A third-party risk management program is critical to understand supply chain risks and collect the relevant signals to inform organizations about their attack surface, security hygiene, insurance coverages, and data protection and privacy practices.”

A supplier risk assessment should look closely at the insurer’s own security hygiene, governance, policies and controls.

You may want to ask:

How do coverage and limits apply to both first and third-parties? For example, does the policy cover third-party service providers? On that note, find out if your service providers have cyber insurance and how it affects your agreement.

Speak With an Experienced Insurance Broker

Choosing the right cyber insurance policy can get tricky, especially with the  constantly evolving nature of cyber attacks. By partnering with a broker who understands your business and its risk level, business owners can better ensure that they are receiving the coverage they need as well as taking the proper steps to prevent cyber attacks.

Have More Questions About Cyber Insurance?

Apex Risk & Insurance Services was specifically founded to fill the service and consultative gap left by agency consolidations in the insurance marketplace. These consolidations have left customers who are used to a boutique service approach with no personal connection to their team.

Apex brings the high-touch service proposition back to the San Diego business community and beyond.

Read on to learn more about how to protect your business from a ransomware attack.

What You Need to Know About Changes to Cyber Insurance

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The world of cyber insurance has gone through a slew of changes in the past five years. Why? There has been an exponential growth in the number, scale, and technique of cyber attacks. Each of these increases has led to an increase in demand for cybersecurity insurance, a consequential increase in premiums as well as some other adjustments.

Let’s go over the basics of cyber insurance so we can understand the impact of these changes. 

What is Cybersecurity Insurance?

Cyber insurance, also called cyber security or cyber liability insurance, covers businesses against losses resulting from data breaches. This form of insurance primarily applies to businesses that run secure networks as part of their daily operations.

A cyber attack on a business without cyber insurance may result in legal fees, compromised data, and the loss of computer systems. 42% of small businesses have experienced a cyberattack within the past year and 53% have experienced multiple data breaches. 

What Does Cyber Insurance Cover?

Coverage varies depending on the policy. However, cyber insurance generally covers: 

  • Fines, legal fees, and penalties
  • Credit and fraud monitoring services
  • Finding and addressing the security defect
  • Notifying customers of a data breach
  • Restoring the personal identities of affected customers
  • Recovering compromised data
  • Repairing damaged computer systems

How Has Cyber Security  Insurance Changed?

Cyber Attacks Have Evolved

Since 2020, cyber-attacks have changed significantly and become even more common with the increase of remote and hybrid work models. These attacks can be much more nuanced than in the past.  For example:

  • Phishing emails have fewer red flags and instead include a subtle change. For example, an email from one of your vendors may have a different bank account to pay your bill. 
  • Ransomware attacks are on the rise due to innovations in technology
  • Ransomware attacks have also moved onto a larger scale, such as the attack against Microsoft Windows Remote Desktop Protocol (RDP) credentials to gain access to victim networks

Increase in Demand: More Businesses Are Investing in Cyber Insurance

The U.S. Government Accountability Office found that in 2021, more insurance clients are choosing to purchase cyber coverage. In fact, this number increased from 26% in 2016 to 47% in 2020. As a response to this rise in demand, many insurance providers are changing their coverage. 

Insurance Providers Are Adjusting Cyber Insurance

With the rise in cyber-attacks and the demand for cyber insurance increasing, insurance providers may choose to make adjustments to the coverage they offer. Let’s take a look at how.

Increased Rates for Cyber Insurance

Many insurance providers may increase their rates. In its 2021 report, the U.S. Government Accountability Office found that a number of insurers reduced coverage limits or increased premiums for higher-risk industries. These industries may include:

  • Academic institutions 
  • Health care 
  • Public sectors

Tightened Policy Terms

In order to reduce losses from cyberattacks, insurers have tightened policy terms and conditions. For example, in the past, cyber coverage was often included with commercial property and casualty policies. Now, many insurance providers offer cyber coverage separately instead. 

Lower Coverage Limits

Due to the rise of cyber events and the resulting spike in payouts, insurers are reexamining the coverage limits they offer. 

Documentation May Be Required 

Many insurance providers aren’t quick to fill in the gap in demand for cybersecurity insurance. In fact, some insurers and reinsurers are stepping back to evaluate their risk appetite due to the increase in the severity of cybersecurity attacks. 

To mitigate risk, some providers have begun to transition towards requiring documentation to evaluate a client’s cyber programs. Eventually, if the insured party fails to provide sufficient documentation, they may not receive coverage. 

What Do These Changes Mean for Policyholders?

For policyholders, these changes can lead to fewer coverage options, stricter standards as well as more exclusions. Businesses may be required to pay more or risk having lower coverage limits.

How Can Policyholders Minimize Cyber Insurance Increases?

Insurers are looking for policyholders to reduce their risk of a cyberattack by taking steps such as:

  • Limiting network access to authorized personnel 
  • Implementing multi-factor authentication on all access points to the network, such as phones, computers, email, etc. 
  • Maintaining updated operating systems, software, and applications 
  • Utilizing anti-virus software and anti-malware solutions that will automatically update and run regular scans of your system
  • Regularly backing-up data
  • Creating a plan in case the business experiences a cyber attack
  • Training employees on cyber security, including information about phishing emails and not opening malicious attachments
  • Quarantining suspicious emails

Have More Questions About Cyber Insurance?

Apex Risk & Insurance Services was specifically founded to fill the service and consultative gap left by agency consolidations in the insurance marketplace. These consolidations have left customers who are used to a boutique service approach with no personal connection to their team.

Apex brings the high-touch service proposition back to the San Diego business community, and beyond

Read on to learn more about how to protect your business from ransomware.

Ransomware: What is it and How do You Prevent it?

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Years ago, cybersecurity attackers used ransomware to swindle companies out of a couple of hundred dollars in losses. Today, attackers demand upward of hundreds of thousands of dollars during a cyber breach.

Because of higher demands, a cybersecurity breach can be detrimental to a small business. In fact, according to the National Cyber Security Alliance, 60% of small businesses that are targets of a cyberattack close within six months.

Let’s discuss ransomware: what is it and how can you prevent it?

What is Ransomware?

Ransomware is a type of malware (malicious software) that blocks a computer system by encrypting it.

These software programs are typically extremely difficult and/or expensive to remove once placed. Most often, cyber attackers will demand a hefty, often increasing fee, for owners to reaccess the encrypted files and data; blackmailing business owners into paying the ransom.

Additionally, attackers may threaten to publish or leak personal information from the computer they’ve overtaken.

Small Businesses and Ransomware

Small businesses have become an increasingly common target amongst cyber attackers. 42% of small businesses have experienced a cyberattack within the past year and 53% have experienced multiple data breaches. 

Let’s take a look at what other businesses cyber attackers target.

What Businesses or Industries are Targets of Ransomware?

The most common—but by no means the only—targets of cyber attackers include the following industries:

  • Education
  • Retail
  • Business, professional, or legal services
  • Central government
  • IT
  • Manufacturing
  • Energy and utility infrastructure
  • Healthcare
  • Local government
  • Financial services

However, it’s important to note that any device connected to the internet is a potential ransomware target.

Personal computers were once the main choice of attackers, but now attackers focus on businesses. Why? Because businesses are willing to pay more to retrieve their data.

How Does Ransomware Work?

The two most common forms of ransomware are screen lockers and encryptors. Let’s discuss each in a bit more detail.

Screen Lockers

Screen lockers simply “lock” the screen of a device and state that the system is encrypted. This locked screen blocks owners from using their systems completely

Encryptors

As the name suggests, encryptors encrypt data in a system. This means owners can’t access the data without a decryption key that must be purchased from the attacker.

Encryptors can also contain a screen locker with the details of which cryptocurrency to purchase to retrieve data.

Should You Pay the Ransom?

According to the FBI, no. Why? In the past, some victims of cyber breaches have paid the ransom and then:

  • Do not regain access to their data
  • Do not receive a response or key to their encrypted data
  • Or, give their money to attackers who have no way of decrypting the data themselves

How to Prevent Ransomware

Although no measures can eliminate the risk of a cyber attack, some defenses can significantly reduce the chance that attackers will be successful.

Being Careful Online

Users should be cautious and conscientious online, especially when downloading applications or clicking links in emails. Users can also:

  • Maintain updated operating systems, software, and applications 
  • Utilize anti-virus software and anti-malware solutions that will automatically update and run regular scans of your system
  • Regularly back-up data in your computer system
  • Double-check that the back-ups are completed successfully
  • Have a plan in case the business experiences a cyber attack
  • Train employees on cyber security, including information about phishing emails and not opening malicious attachments
  • Filter content
  • Quarantine suspicious emails

Using Cyber Insurance to Protect Your Business

Cyber insurance is a must for anyone depending on a digital infrastructure to run their business. These coverage policies help to protect businesses against the financial devastation associated with a cyber attack.

Let’s talk more about cyber insurance below.

What Does Cyber Insurance Cover?

Coverage varies depending on the policy. However, cyber insurance generally covers: 

  • Fines, legal fees, and penalties
  • Credit and fraud monitoring services
  • Finding and addressing the security defect
  • Notifying customers of a data breach
  • Restoring the personal identities of affected customers
  • Recovering compromised data
  • Repairing damaged computer systems

 For more information, review our commercial insurance policies.

What Happens to My Business If I Don’t Have Cyber Insurance?

A ransomware attack on a business without cyber insurance can result in the loss of hundreds of thousands of dollars between:

  • Various legal fees and fines
  • Recovery of compromised data
  • Damaged computer systems, and
  • Other necessary costs

The average small business pays $690,000 to recover from a cyber-attack. Middle-market companies can pay upward of $1 million. Is it worth the fate of your business?

Consider APEX to Protect Your Business

Apex Risk & Insurance Services was specifically founded to fill the service and consultative gap left by agency consolidations in the insurance marketplace. These consolidations have left customers who are used to a boutique service approach with no personal connection to their team.Apex brings the high-touch service proposition back to the San Diego business community, and beyond. Get in touch today; then, read on to learn more about underinsured homeowners and inflation.