Cyber insurance has become vital for every single business on the market, especially as the world moves to a digital-first infrastructure. Cyber attacks are on the rise (we’ll cover this more in a bit), and they can inflict serious damage.
Just like car and home insurance, cyber insurance provides financial protection in case of an incursion. Depending on what kind of policy you choose, it can cover data breaches, system failures, and other cybersecurity incidents.
But here’s the kicker: cyber insurance isn’t as straightforward as your typical home or car insurance. With cyber threats ever-evolving, traditional insurers are struggling to come up with comprehensive coverage plans. As such, insurance policies are becoming more complex and specialized, making it hard for businesses to understand and protect themselves.
If you’ve been wondering whether or not you need cyber insurance and what the process will look like, here’s our in-depth look into cyber insurance in 2023 and how it will affect your business.
What Is Cyber Insurance?
Just like your home insurance protects you when disaster strikes, cyber insurance swoops in when you experience a cyber disaster. It’s a type of policy that provides financial coverage if your business falls victim to cybercrime, such as data breaches or other malicious attacks. It can also provide liability protection if your organization’s lack of security contributes to harm caused by a third party.
Since the technology used in a company’s digital infrastructure is ever-evolving, insurance can be customized so you get exactly what you need. There are a range of policy types available, from Data Breach Insurance and Cyber Liability Insurance to Network Security Insurance and Crisis Management Services.
Who Does Cyber Insurance Protect?
It’s mostly protecting you and your business! By giving you the funds you need to address any cyber attack or data breach, it helps cover the costs of a lengthy investigation and even damages incurred by customers. It also provides protection to your employees in the form of legal fees and other expenses related to an incident.
But you’re not just protecting yourself—you’re also protecting those who interact with your business and its data. By carrying cyber insurance, you show customers, vendors, and partners that you take their security seriously.
Who Needs Cyber Insurance?
Simply put, all businesses need it—no matter if they have one employee or one thousand. If you own a website, store data online, use cloud computing services, or interact with customers digitally in any way, then you need to consider securing cyber insurance.
Is It Difficult to Get Cyber Insurance? Changes Coming in 2023
Here are a few sobering stats to show what you might be facing in 2023:
- About 150 billion spam emails are sent every day and 35% of data breaches happen because of a compromised business email
- Cybercriminals can break through 93% of company networks
- Ransomware-related data leaks increased 82% in 2022
- Data breaches exposed 22 billion records last year
As the cyber risk goes up, so does the complexity of cyber insurance policies. The price of premiums is going up—they increased 79% in Quarter 2 of 2022 when compared with 2021 prices. The stakes are higher for everyone, which means companies need to understand the ins and outs of cyber insurance even more in order to make an informed decision about their coverage.
Going into 2023, insurers are looking for more transparency from companies when it comes to their cybersecurity practices. Businesses will be expected to have a clear understanding of the risks they face, as well as how they’re addressing those risks. This means more frequent audits and the possibility of an audit before securing insurance.
It’s possible that following NIST Cybersecurity Framework and guidelines will become a requirement for coverage. Depending on your industry you may have a coverage exclusion for “nation-backed attacks.” These are considered “acts of war,” which means the risk is too big for cyber insurance companies.
How to Make It Less Complex to Get Cyber Insurance
The cost of cyber insurance is likely to continue to rise and the requirements for coverage become more stringent, so it’s vital to stay on top of the changing requirements. The best way to do that? Partnering with a managed service provider (MSP) like ANC Group.
You can think about it like this. Your home needs to meet certain requirements to get insured. If your roof is collapsing or you have a gas leak, nobody is going to insure you. You could try to do those projects on your own, but maybe you’ve never fixed a roof before, and trying to fix a gas leak would be downright dangerous.
Bad cybersecurity is like a digital gas leak. Instead of using your time, money, and resources to do a job that might create more problems down the road, you can outsource that effort to an MSP. They’ll not only fix the existing problems, but they’ll give you all the expertise you need to be trusted by cyber insurance providers.
An MSP can help assess your current security measures, identify gaps, and create a plan to reduce the risk of data breaches. They can also provide ongoing support in the form of monitoring your system for threats and responding quickly when they arise.
Having an MSP on board means you have someone proactively monitoring your system, which can go a long way when it comes time to secure insurance. It shows insurers that you take cybersecurity seriously and have the right systems in place to protect your data.
Thrive Digitally in 2023 With ANC Group
At the end of the day, cyber insurance is about protecting yourself—and those who interact with you digitally—from data loss and financial ruin caused by cybercrime. It’s important to be aware of the risks and take the proper steps toward protecting your business and improving your cyber posture.
ANC Group can help give you peace of mind when it comes to cybersecurity and cyber insurance. With our managed services, risk assessments, and expert advice, you’ll have the complete package to make sure your business is secure and covered. Don’t take the risk when it comes to your digital safety—schedule a consultation with ANC Group and we can work together to protect your data.