What You Should Know About Cyber Security Insurance

Businesses And International Cyber Warfare

At the Q1 2022 Business Roundtable conference hosted by the White House, United States President Joe Biden explained the cyber security implications of Russia’s decision to invade Ukraine in February. While this may sound like a topic that should be focused on protecting critical infrastructure and national security, the reason President Biden was talking about it before an audience of medium and small business is the cyber threat space has greatly expanded in recent years.

The Future of Cyber Security Insurance

Following the aforementioned Business Roundtable, one of the post-conference topics of discussion was cyber security insurance for business owners, which has gone from being considered a good idea to becoming a modern necessity.

The pace of major cyber attacks on American businesses has more than doubled over the last year. Cybercrime groups have become more sophisticated and aggressive in their attacks, and this can largely be explained by what intelligence agencies have noticed since about 2015: Russia and other adversaries of the U.S. are actively working with established cybercrime organizations to destabilize the American way of life, and this includes targeting the business sector.

Cyber security insurance provides coverage for situations in which malicious third parties breach business networks and cause material and financial losses. In essence, cyber security insurance policies are of the business liability kind. When this type of insurance was introduced more than a decade ago, it was largely thought of as a specialty coverage. These days, cyber insurance policies are almost mandatory, and they may even become a matter of compliance required by state and federal business regulators in the near future.

How Do I Know If My Business Requires Cyber Security Insurance?

At Synchronet, we tell our clients the following: If your company relies on a data network for daily operations, you need this kind of coverage. This includes physical office servers as well as cloud networks. Even if you only operate Shopify or Amazon e-commerce stores, it is only a matter of time before hackers take notice.

How Do I Qualify For Cyber Security Insurance?

When cyber security insurance was still somewhat of a novelty, just about any business owner was able to get a policy without having to answer too many questions. What we are seeing at SynchroNet these days is that some of our clients are being turned down for coverage because insurance companies think their IT systems are not adequately protected.

If they are not denied right away, they end up paying expensive premiums for policies that do not offer sufficient coverage. There is also the risk of being dumped by the insurer after a major loss caused by flaws in the IT security plan.

Can A SynchroNet Audit Help Me Get Insured?

Based on what we have mentioned thus far, it should not be surprising to learn that quite a few insurance companies will not issue cyber policies until an IT security audit has been completed.

These audits seek to determine the value of the assets held within IT systems; furthermore, they provide a view of how the network is organized in terms of enterprise servers, public cloud access, and remote access operations.

Depending on the insurer and how much coverage your business needs, the audit will also look for vulnerabilities and flaws in the system. Some insurers will go as far as conducting penetration testing as if they were hackers; this often applies to business owners whose operations tend to be more sensitive and prone to cyber attacks.

The bottom line of cyber security insurance is that you definitely need it. Qualifying for this kind of coverage and for reasonably priced premiums is a matter of identifying what could go wrong in your data network; it is also a matter of eliminating gaps and possible issues that hackers can exploit.

Insurers will also look at other factors such as data backup frequency and procedures, multi-factor authentication, endpoints, and password policies. If you believe your data network needs to be audited before shopping for cyber security insurance, please contact SynchroNet today.