It might be hard to believe, but cybersecurity insurance is younger than the worldwide web—yes, some of us are old enough to remember the genesis of the internet—and this type of coverage is already undergoing a huge shift. Each year, cyber threats have grown and the costs of breaches have risen to astronomical heights, making cyber insurance an essential component of a business’s insurance portfolio.
Third-party integrations–think your CRM or customer service ticketing platform—are increasingly common sources of security breaches, which is why more and more small- and medium-sized businesses are being forced to take cyber threats seriously.
SMBs usually don’t have a large internal IT department or a custom-built IT infrastructure. Instead, they take advantage of the subscription model offered by most software providers. Under this model, any one employee could have login credentials to a company email account, instant messenger, CRM, billing software, company intranet, and more. It’s nearly impossible for a single internal IT person to monitor all of this effectively.
What is cyber insurance?
Companies both large and small have turned to cyber insurance to mitigate the devastating costs of a data breach, including fines, lawsuits, professional mitigation assistance, and other costs. Some plans even provide coverage for natural disasters or accidents that may disrupt remote locations.
Cyber Insurance Is Evolving
It’s no secret that cybercriminals regularly invent new methods to steal valuable information, and insurance companies are adapting their coverage accordingly…but not always in ways that we like.
As demand for this type of coverage soars (along with the frequency and severity of data breaches) insurance companies are beginning to take a step back. They’ve simply had to pay out far more than they’re comfortable with, in recent years. And when you consider that the average cost of a breach is around $4.24 million, it’s no surprise that many providers don’t want to take on that kind of risk.
Ransomware is largely to blame.
Ransomware is a type of malware that essentially steals access to a database and blocks the owner until they pay a ransom to the cybercriminal. If they don’t pay, all of the sensitive data stored within could be released on the dark web.
The recent rise in this type of attack is largely due to the evolution of more sophisticated and easier-to-use ransomware tools, meaning an attacker doesn’t need extensive IT knowledge to operate them. Easier methods mean an increase in attacks.
What can you expect?
With the increased risk, we can be sure that premiums have and will continue to rise. For those insurance providers who are still offering cyber risk insurance, the criteria for obtaining insurance are getting more and more stringent. It makes sense, right? If a business already has a strong cyber security system in place, they’re better protected and the risk of cybercrime is greatly reduced. Of course, reduced doesn’t mean non–existent.
Insurance providers are requiring documented proof of multi-factor authentication (MFA), encrypted backups, incident response plans, regular monitoring and testing of cybersecurity defenses, and more, to even consider insuring a client. And for smaller businesses that don’t have the resources or expertise to implement rigorous cybersecurity on their own, many insurers are demanding that they seek external help.
Here’s where third-party managed cybersecurity providers come into play. These MSPs can provide guidance at the very least, but small businesses are also recognizing the value of hiring them to manage this incredibly difficult and risky piece of their IT infrastructure. Not only does an MSP perform a vulnerability assessment and penetration testing, but they also provide round-the-clock monitoring and mitigation services.
ForceNow Can Help
If you’re looking to offload your cybersecurity concerns or to simply augment your internal staff, consider partnering with ForceNow. We monitor, detect, and investigate security threats, reducing their duration from months to minutes. Our cybersecurity services also allow you to qualify for comprehensive, affordable cyber risk insurance plans through our partners.
