IMAGINE THIS scenario:
You’re a small business owner who has poured countless hours and resources into building your company from the ground up. You have a website that customers can use to buy your products or services, or you may store sensitive customer data such as addresses and detailed customer information. You’re confident in your company’s ability to provide quality products and services, but have you considered the potential financial impact of a cyber-attack?
Cyber threats are no longer just a concern for large corporations – small businesses are just as vulnerable. In fact, according to a report by Verizon, 43% of cyber-attacks target small businesses. The financial impact of a cyber-attack can be devastating, with the average cost of a data breach for a small business being over $200,000.
This is where cybersecurity insurance comes in – it can provide businesses with important protection against the financial impact of a cyber-attack, but in today’s insurance environment, the insurance carriers are requiring more security controls and procedures to be in place before you could qualify for insurance.
At PiTan, we offer comprehensive cybersecurity risk assessments that can help businesses understand their specific areas of vulnerability. Based on this assessment, we can recommend the types of coverage that will best protect the business against its unique risks as well as provide implementation and remediation efforts to keep your business current for its cybersecurity needs.
We also work with businesses to develop and implement effective cybersecurity measures that can help reduce the risk of a cyber-attack in the first place. By taking proactive steps to protect against cyber threats, businesses may qualify for better insurance coverage and potentially lower premiums.
In this blog, we’ll discuss the importance of cybersecurity insurance and the factors that are driving up its cost, as well as provide tips for businesses to get properly insured.
WHY COMPANIES NEED CYBERSECURITY INSURANCE?
Cyber-attacks can come in many forms, from ransomware that encrypts your data until you pay a fee to phishing attacks that trick employees into revealing sensitive information. The costs associated with these attacks can quickly add up, including the cost of hiring experts to fix the damage, notifying affected customers, and potential legal fees if a lawsuit is filed.
Cybersecurity insurance can help cover these costs, protecting your business from the financial impact of a cyber-attack.
But the need for cybersecurity insurance goes beyond just the financial impact. Cyber-attacks can damage your reputation and erode customer trust, potentially leading to lost business in the long term. Having cybersecurity insurance in place can also help demonstrate to customers and stakeholders that you take cybersecurity seriously, which can boost their confidence in your business.
Whether you’re a small business or a large corporation, cybersecurity insurance is crucial to protecting your digital assets. It can give you the peace of mind to focus on growing your business, knowing that you’re prepared in case the unexpected happens.
WHY INDUSTRY PRICES ARE GOING UP?
As the frequency and severity of cyber-attacks continue to rise, insurance companies are facing more claims and losses. This, in turn, has led to an increase in premiums for businesses. In addition, insurance companies are becoming more selective in their underwriting, meaning that businesses with poor cybersecurity measures in place may struggle to obtain coverage or may face higher premiums.
But it’s not just the insurance companies that are feeling the impact of cyber-attacks. Businesses themselves are also facing increased costs associated with cyber threats. As stated above, the average data breach cost for a small business is over $200,000. This cost includes expenses such as IT investigation and remediation, lost productivity, and reputational damage.
Another factor contributing to rising prices is the growing complexity of cyber risks. Cybersecurity threats are not limited to just computer systems and networks; they can also come from third-party vendors, mobile devices, and cloud computing services. Insurance companies must therefore consider a broad range of potential risks when setting premiums, which can be a complex and time-consuming process.
Finally, regulatory changes are also affecting the cost of cybersecurity insurance. The EU’s General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), for example, have increased the financial penalties that can be imposed on businesses for failing to protect customer data. Insurance companies are factoring in these potential penalties when setting premiums, which is driving up costs.
WHY ARE CONSUMERS FINDING IT HARDER TO GET THEIR INSURANCE RENEWED?
Insurance companies are becoming increasingly concerned about the level of risk associated with cybersecurity threats. As a result, they are more focused on ensuring that their policyholders take the necessary precautions to protect themselves against cyber-attacks. For this reason, insurance companies are now placing greater emphasis on implementing strong cybersecurity measures.
Without proper security measures, businesses are at risk of being denied coverage or increasing their insurance premiums. This is particularly true for businesses that have experienced a cyber-attack in the past, as they are deemed to be at greater risk of being targeted again in the future.
To ensure that your business can obtain and maintain proper cybersecurity insurance coverage, it’s important to take the necessary steps to protect your assets. This includes implementing firewalls, encryption, and other security measures and providing regular employee training on cybersecurity best practices.
In addition to meeting the requirements set by insurance companies, proper cybersecurity measures can also help to safeguard your business against potential cyber-attacks. This can include preventing unauthorized access to sensitive data, protecting against malware and viruses, and detecting and responding to suspicious activity.
Ultimately, by taking the necessary steps to implement proper cybersecurity measures, businesses can not only protect themselves against cyber-attacks but also ensure that they are able to obtain and maintain the insurance coverage they need to mitigate the financial risks associated with such attacks.
THE ROLE OF CYBERSECURITY CONSULTING SERVICES IN SELECTING THE RIGHT INSURANCE COVERAGE :
Selecting the right cybersecurity insurance coverage can be a complex process, as businesses need to consider their specific risks and vulnerabilities. This is where cybersecurity consulting services can be extremely valuable.
At PiTan, we provide businesses with a comprehensive cybersecurity risk assessment that helps them identify their specific areas of vulnerability. Based on this assessment, we can recommend the types of controls that will best protect the business against its unique risks.
We also work with businesses to develop and implement effective cybersecurity measures that can help reduce the risk of a cyber-attack in the first place. By helping businesses identify and mitigate their risks, we can help them qualify for better insurance coverage and potentially lower their premiums.
TIPS FOR GETTING PROPERLY INSURED :
To ensure they are properly insured against cyber risks, businesses should take the following steps:
- Conduct a cybersecurity risk assessment to identify potential vulnerabilities and risks.
- Work with a cybersecurity consulting firm to develop and implement effective cybersecurity measures.
- Choose an insurance provider with cybersecurity insurance experience who understands your business’s specific risk.
- Understand the different types of coverage available and select the types that best meet your needs.
- Regularly review and update your cybersecurity measures and insurance coverage to ensure you remain protected against evolving threats.
BEFORE WE BID ADEIU :
As cyber threats continue to evolve and become more sophisticated, businesses need to take proactive steps to protect themselves against the financial impact of a cyber-attack. Cybersecurity insurance can provide businesses with important protection against these risks. Still, working with a cybersecurity consulting firm is important to ensure you are properly insured and have effective cybersecurity measures in place.
At PiTan, we understand the importance of protecting your business against cyber threats. We offer a range of cyber security consulting services that can help you identify your specific risks and vulnerabilities, implement effective cyber security measures, and select the right insurance coverage to protect your business. Contact us today to learn how we can help you protect your business against cyber risks.
