A decade ago, the idea of obtaining cybersecurity insurance could have been at the bottom of a business leader’s priority list. Nonetheless, it has evolved into a crucial requirement in how businesses respond to costly cyber-attacks such as ransomware, which is a critical threat.
Cybercrime is on the rise, and it’s only going to get worse. As per the 2020 Internet Crime Report from FBI’s Internet Crime Complaint Center (IC3), there were more than 300,000 complaints in 2019 and reported losses of more than USD 4.2 billion. These figures are alarming, and they should serve as a reminder to managed service providers (MSPs) and enterprises that they must be prepared. In 2022, cyber insurance has become a must-have, but obtaining and keeping it will be challenging.
Premiums are increasing
In the last 24 months, the industry has seen a shift in cyber incidents from simple data breaches and business email compromise to more sophisticated ransomware threats. An increase in attacks has also affected critical infrastructure around the world, highlighting the growing threat that organized criminals and state-sponsored hackers pose to all enterprises.
Businesses all across the world have turned to cyber insurance to protect themselves from the financial consequences of these attacks. As premiums grow, companies that use and rely on cyber insurance will be under more pressure to improve their cyber resilience.
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Hardened stance
Many insurance companies are attempting to abandon cybersecurity altogether, or are including conditions in contracts that prevent the insurer from paying out in the event of a ransomware attack. All insurers are now ensuring for less while charging higher premiums.
Before issuing a policy, cybersecurity insurance providers want confirmation that security processes are in place. Many companies are aggressively screening customers to see if they can detect any vulnerabilities before insuring them, and if they do, they either deny coverage or notify the customer that they must patch all of the flaws first or the coverage would be revoked for non-performance.
Insurers have taken a hardened stance and are doing more to protect themselves. As ransomware gangs have started targeting companies that are known customers of cybersecurity insurance providers, this has become a necessity. These cybercriminal gangs do their homework to the point where they know how much a company will receive in the aftermath of a cyber-attack.
Anyone with cybersecurity insurance coverage should take their policy offline or protect it in such a way that an attacker will not be able to learn the terms of their coverage if their environment is completely compromised.
Overall, the cybersecurity insurance market is in a period of reinvention. Insurance companies are paying out so much so frequently that the huge profits they were making only a few years ago have vanished. For most businesses, it’s now a losing proposition.
Also Read: Evolving Role of the CISO: From Defender to Leader
Employee training is crucial
Employee training is critical in efficiently managing cyber-risk, as highlighted by the transition to remote work during the pandemic. Employees mistakenly clicking on a malicious link or otherwise exchanging critical data with threat actors, granting them access to a company’s network, is a common cause of data breaches. Employees may be the weakest link in various circumstances, and cybercriminals are aware of this. As a result, effective training helps in raising awareness regarding cyber threats.
Employee training should be comprehensive and interesting to ensure that everyone on the team understands their role as the first line of defense, and companies should do annual cyber awareness training and quarterly phishing tests. Employees who do not pass the cyber awareness course should be encouraged to continue their education. Incentives for positive conduct, such as reporting phishing attempts, should also be provided.
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