Cyber insurance has become a key component of any organization’s risk mitigation strategy.
(Depositphotos Image/gyn9037)
Cyber insurance is a $7 billion industry projected to grow to $30 billion by 2025.
Walter Hirsekorn, regional vice president of ISG Technology, warns that a rapidly growing industry needs time to mature. “There are a lot of policy issuers out there to get financing,” he said.
Insurers are not cyber experts, Hirsekorn said, so even when dealing with reputable insurers, businesses should carefully evaluate cyber insurance before purchasing.
While large businesses have been buying cyber insurance for decades, many midsize and small businesses believe that the rise in remote work inspired by COVID-19 “opens the door for bad actors. ,” he said, questioning its necessity until he gave him the key to the castle. “It’s become clear globally that companies aren’t taking cybersecurity seriously.”
According to Hirsekorn, 2021 saw a spike in security breaches as claims exceeded insurance premiums. The answer was that in the first quarter of 2022, his premium will increase from 80% to 120%.
He said data breaches in the US increased by 47% from June to July this year, and insurance premiums are expected to continue to rise with it.
Cyber insurance has become a key component of any organization’s risk mitigation strategy. “Like identity theft, you think it’s not going to happen to you until it happens,” he says. “If you have an internet connection, you need it.”
As insurance premiums have increased, security requirements have increased. For example, multi-factor authentication. endpoint detection and response; privileged access management; secure, encrypted, and offsite tested backups;
Hirsekorn said insurance companies won’t cover your company unless they’re in place. The more deterrent it has, the more it determines where it sits in the premium charts.
He encourages business owners to work with a company like ISG to get all the pieces in place before applying for insurance. He said he has 100,000 too few security professionals to hire and will likely have to rely on third parties.
Cybercriminals are developing ways to circumvent safeguards every day, so cyber insurance won’t protect you from a breach in the same way an uninsured car insurance will prevent you from crashing, Hirsekorn said. increase. “They’re not hackers. Cybercriminals run it like a business. They have financial revenue goals.”
IT partners can help educate companies on the importance of developing robust incident response plans before an attack occurs. This plan should include information on how to contact the appropriate personnel, what data needs to be backed up, and what steps should be taken to minimize damage from an attack.
In the event of a ransomware attack, cyber insurance can help businesses recover lost data and get back up and running as quickly as possible. Cyber insurance also helps companies cover the cost of hiring experts to clean up malicious software that may have been installed on their systems.
Hirsekorn said most companies are underinsured for cybersecurity, but given that it could cost half a million dollars or even $1 million in cash just to get it up and running. ,
Generally, premiums are between 3% and 4% of insurance, so $1 million in coverage will probably cost you $30,000 to $40,000.
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