What Are the Requirements for Cyber Insurance?
To help you understand the requirements for obtaining cyber insurance coverage, we reached out to industry experts, including executive country managers and insurance consultants. From maintaining separate data backups to implementing multi-factor authentication, here are the top six requirements these professionals shared to secure your cyber insurance coverage.
- Maintain Separate Data Backups
- Implement a Cybersecurity Plan
- Conduct Security Audits and Assessments
- Establish Robust Cybersecurity Protocols
- Understand Your Cyber Risk Profile
- Implement Multi-Factor Authentication
Maintain Separate Data Backups
In my experience as a country manager, one key requirement to adding cyber insurance coverage is maintaining separate backups of your data. If your company is hit by a ransomware attack and all your data is locked, having no separate backups leaves you at the mercy of the hackers.
However, if you've been diligently creating backups on a separate, secure system, you're in a much better position to recover. Not only does this save your business from potential disaster, but it also makes you a more attractive prospect for cyber insurance providers. They appreciate customers who take proactive steps to minimize risk, and separate backups are a great example of this.
Lorien Strydom
Executive Country Manager, Financer.com
Implement a Cybersecurity Plan
One requirement for cyber insurance coverage is to have a comprehensive cybersecurity plan in place. Cyber insurance providers typically require businesses to show that they have taken reasonable steps to protect their systems and data from cyber threats.
This includes having a documented cybersecurity policy, implementing security controls and monitoring measures, conducting regular vulnerability assessments and penetration testing, and providing employee training on cybersecurity best practices.
By having these measures in place, businesses can reduce the likelihood of a successful cyber attack and show their cyber insurance provider that they are doing what is necessary to mitigate risk. This can help businesses gain more favorable insurance rates and coverage terms, as well as ensure that they are adequately protected in the event of a cyber incident.
Kendall Thomas
Chief Information Security Officer, Emeritus
Conduct Security Audits and Assessments
A business may be required to conduct third-party security audits and assessments in order to get cyber insurance coverage. This helps insurers assess the risk and potential vulnerabilities of the business's IT systems and infrastructure.
It also encourages businesses to prioritize their cybersecurity measures and ensure they are taking the steps to protect sensitive information and prevent data breaches. Failure to conduct these assessments may cause higher premiums or a denial of coverage.
Establish Robust Cybersecurity Protocols
One of the key requirements for cyber insurance coverage is to have strong cybersecurity protocols in place. This means having robust security measures designed to protect sensitive data and IT systems against malicious cyber-attacks. Such protocols could include encryption, regular software updates, firewalls, and employee training on cybersecurity best practices.
Insurance providers will typically insist on having these measures in place before offering coverage, as it helps reduce the risk of a data breach or cyber incident. Companies need to assess and improve their cybersecurity protocols continually to meet the strengthening threat landscape and maintain insurance coverage.
Anirban Saha
Founder, MrPlanter
Understand Your Cyber Risk Profile
As a specialty insurance provider, I understand the importance of cyber insurance coverage for businesses. One requirement for obtaining cyber insurance coverage is a thorough understanding of a business's cyber risk profile.
Insurance brokers must work with their clients to identify potential cyber threats and vulnerabilities within their organization. This may include assessing their technology infrastructure, data management practices, and employee training programs. Insurers may also require businesses to implement certain cybersecurity measures before providing coverage, such as multi-factor authentication, encryption, and regular system updates.
By working closely with their clients to understand their cyber risk profile, insurance brokers can help them receive comprehensive and effective cyber insurance coverage. It is crucial for businesses to prioritize cyber risk management and work with experienced brokers and insurers to mitigate their risk exposure.
Derrick Miler
Insurance Consultant, CHES Special Risk
Implement Multi-Factor Authentication
There are many requirements that cyber insurance agencies may look at, but one foundation is multi-factor authentication. Just using a username and a password is no longer effective or safe.
Multi-factor authentication should use secure "login" solutions to help prevent data leakages and to ensure there are no "gaps" or "holes" in your security system. A token-based authentication system can be useful in a corporate environment. When a username and password is combined with a hardware token that generates a unique code for authentication, it can help make the system more secure.
Of course, a hardware authentication solution is not always viable, especially in a small business environment. In these cases, the use of biometrics can still add an extra layer of security when employees need to sign into their staff accounts.
Dr. Willy Portier
Co-founder, Concerty
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