A single slipup can be very costly. For example, an employee clicking on a link in a malicious email can spread malware across your entire system, leading to damages that may cost a lot in service fees and otherwise to fix.
Cyber insurance protects businesses against incidents like these by providing threat detection and prevention services and helping businesses cover damages that result from a cyber attack.
But to qualify for coverage, cyber insurers have requirements to undergo a cyber insurance risk assessment. Policyholders must meet minimum requirements to keep their risk at an acceptable level.
Here’s everything you need to know about cyber insurance requirements.
What is Cyber Insurance?
Cyber liability insurance protects businesses from liability and damages that result from cyber attacks, including hacks, data breaches, phishing attacks, and malware.
It can help cover costs like legal fees, fines, and settlements. Cyber insurance can also help with income lost due to downtime caused by a cyber attack or data breach. It is an important part of any business’s cybersecurity plan and risk management strategy.
What Does Cyber Insurance Cover?
Cyber insurance policies offer varying coverages depending on your specific policy.
According to the FTC, businesses should make sure their policies cover the following:
- Data breaches
- Cyber attacks on your company data held by vendors and third parties
- Network breaches
- Cyber attacks that occur anywhere in the world — not only in the US
- Terrorist acts
Business owners should also check to make sure their policies include a “duty to defend,” meaning the insurer will defend you in a lawsuit or investigation after a cyber attack.
Many policies also offer additional services like threat detection and response to help businesses avoid potential attacks.
First-party coverage is designed to help businesses recover from a cyber-attack or data breach. This type of insurance covers expenses like notification costs, investigation costs, and PR services associated with a cyber incident.
It may also provide coverage for lost income due to the attack, business interruption insurance for those affected by the attack, and credit monitoring services for customers impacted by the breach.
Third-party cyber coverage is designed to protect businesses from losses caused by a third party’s negligence. This type of insurance covers the cost of legal fees, settlements, and judgments associated with claims brought against you for damages after a data breach or another cyber incident.
It may also cover fines and penalties associated with non-compliance with industry regulations, as well as costs associated with notifying customers and other involved parties of a breach.
Who Needs Cyber Insurance?
Cybercriminals target all types of businesses. While large companies might be seen as high-value targets, small businesses are just as vulnerable to attacks due to their often limited cybersecurity measures.
As a result, any company that stores and handles data can benefit from having cyber liability insurance.
Meeting Cyber Insurance Requirements
Cyber attacks can result in significant financial damages, so cyber insurance carriers want to minimize their risk as much as possible.
To do this, many insurers require potential policyholders to undergo a cyber risk assessment to ensure they meet certain standards. If you cannot pass this assessment, you may have trouble qualifying for cyber liability insurance.
While every insurance carrier differs, most will require you to meet the same basic criteria.
Multi-factor authentication (MFA)
MFA requires users to input a code — usually sent through SMS or email — to complete the login process when signing into a device or online account.
MFA makes it difficult for cybercriminals to log into employee accounts and devices even if their login information is compromised.
Businesses should regularly back up their data using a secure cloud solution or external media to protect themselves against ransomware attacks. Backups should be encrypted and separated from the main network.
Phishing attacks are a major threat to businesses of all sizes. Email filtering helps prevent these by automatically sorting suspicious emails into the spam folder and scanning email attachments for potential threats.
All workplace devices should have reliable antivirus software installed. This software should be regularly updated to ensure it protects against major cybersecurity threats.
Privileged access management (PAM)
Only select users, including IT and network administrators, should have access to privileged permission accounts, and these accounts should be secured by login credentials that are completely separate from general user credentials.
PAM systems audit the activity of privileged users and only allow access for as much time as needed to perform specific actions.
Endpoint detection and response (EDR)
EDR monitors the activity of endpoints on the network, such as computers and mobile devices that employees use to access business information. EDR systems detect and alert when suspicious activity is detected, giving the IT team time to respond and prevent a potential data breach.
Request a Quote
Cyber insurance helps protect businesses from common cybersecurity threats, but to qualify for coverage, businesses may need to meet certain eligibility requirements.
At KSA Insurance, we partner with Coalition to help businesses in South Carolina and across the southeastern United States find affordable and comprehensive cyber insurance solutions.
Contact us today to get a quote and learn more about cyber liability insurance.