Two mistakes happen when it comes to cyber risk management.
The first mistake is relying on cybersecurity tools and awareness at the expense of purchasing cyber insurance, which leaves companies’ liabilities exposed. It’s like if someone were to install a security system for their home and decide they don’t need homeowners’ insurance.
The second mistake is relying on cyber insurance at the expense of cybersecurity tools and awareness, which not only leaves a company’s systems exposed, but can lead to a careless security posture and result in higher premiums–both individually and for the market as a whole. Carriers have caught up to this behavior with stricter underwriting and higher premiums, ensuring that Insureds have a proper security posture before binding coverage.
No matter the size of your business, addressing cyber risk is a one-two punch. The ‘one-punch’ is to invest in best risk management practices and tools needed to combat cybercriminals. The two-punch is to purchase Cyber Liability Insurance.
Cyberattacks are now among the most common and costly threats to businesses in today’s Digital Age. One recent EY study (via CNBC) found that CEOs see cybersecurity as the number one threat to the global economy in the next 5 to 10 years.
Larger companies are responding by investing in advanced technologies that increase productivity. These companies are also investing in advanced cybersecurity insurance solutions that help position their company with the confidence and courage they need to remain competitive.
Which Businesses Need Cyber Liability Insurance?
Whether a small business or an enterprise, if the organization stores and shares data, the company is at risk. Don’t be fooled by antivirus protection; alone, it is not sufficient. According to Ponemon Institute, 68 percent of respondents in a study reported that their company experienced one or more endpoint attacks that successfully compromised data assets and or IT infrastructure over 12 months.
Secondly, phishing emails are at an all-time high in 2020 and 2021. Researchers from Stanford University and a top cybersecurity organization found that approximately 88 percent of all data breaches are caused by an employee mistake. Human error is still very much the driving force behind an overwhelming majority of cybersecurity problems, and these problems are amplified when privileged user accounts are compromised–accounts where sensitive data and organizational controls are much more easily accessed.
When the Cost is High
When cases of cyberattacks grow, the costs of policies rise. Cyber insurance, also known as cyber liability insurance, protects a business from the unpredictable. Without some type of coverage, these unexpected attacks can wipe out any business financially.
About one-third of U.S. businesses hold cyber insurance policies, and the cyber insurance market is expected to grow to $7.5 billion in the next decade, according to PwC.
While it is not guaranteed to lower the cost of a premium, there are three focus areas to implement, which are prominent and emerging criteria for underwriters to review on cyber liability applications:
- Develop an incident response plan that will allow for quick containment of an attack
- Use multi-factor authentication
- Deploy cybersecurity employee awareness training
In-depth Understanding of Cyber Liability
FifthWall Solutions takes a consultative approach to help agents understand cyber liability nuances. We evaluate, educate, and elevate the right solution, offering cyber coverage and breach prevention and response tools to protect an organization from liabilities.
With broad market access and extensive product knowledge, we are quoting and binding business for mid-size to larger companies. We have access to more than 30 markets and offer limits up to $100 million in coverage, allowing agents to quickly identify the right policies today and at renewal.