You did your due diligence years ago, purchased cyber risk insurance, and made reasonable investments in all the right cyber security tools. Surely, you’re prepared for anything that comes your way, right?
Maybe yes, maybe no. Regarding your cyber risk insurance, the bar for the “right” amount constantly changes based on your risk profile and business aspirations. So, how do you know when your cyber risk insurance isn’t doing the job anymore?
While your mileage may vary on these, here are the most common triggers I’ve seen for initiating a cyber risk insurance review. If any of these situations have happened at your company lately, it may be time for your IT leadership to discuss them proactively with your cyber risk insurer. Your cyber risk insurance is something your company can’t afford to skimp on.
How to Know It’s Time for a Cyber Risk Insurance Review
Remember that cyber risk insurance is only one essential part of your cybersecurity program. Yet, it’s a particularly important that your coverage is complete, proactive, and well-funded. Here’s what to look for.
#1—You’re Experiencing a Higher Level of Intrusion Attempts
Has your company been the target of sustained, heightened cyberattack attempts? Are you discovering more anomalies and malware in your system? Have you recently had a significant ransomware demand? Even if you successfully addressed these threats, this may indicate that you are becoming a more attractive target or have moved into an area of business that puts you more at risk.
If this is the case, it may be time to reconsider how much a successful cybercrime attack could cost your business now. If that number is higher than it used to be, or your likelihood of attack has increased, it’s time to make new cyber risk coverage investments.
#2—Your Insurer Has Stricter Underwriting Requirements
Coverage requirements are changing fast to keep up with rapidly evolving threats. Because of this, you may find yourself in a situation where your cyber risk insurer is suddenly asking for proof that you have more and different cyber security tools, backup options, or security procedures. This may also be triggered if you’ve undergone a corporate merger, acquisition, or significant expansion, which can alter your threat vectors.
These significant shifts should trigger a fresh examination of your coverage levels and types. It’s a great time to reassess and build for the future.
#3—Your Business Partners Require It
Have you recently moved into new areas of business that require you to serve a different client base? Companies in highly regulated industries like health care, manufacturing, or retail ask all their vendors to show proof of their safe cyber security practices. This ensures that all parts of their operational chain meet the standards of the regulators governing them.
Cyber risk insurance is a big part of the proof you will need to show these discerning vendors and clients. As you work to ensure your cybersecurity posture is up to their standards, don’t forget to ensure your cyber risk insurance is up to standard, too. This investment could also play a key role in helping you land new business in new industry verticals.
#4—Your Insurer Has Just Raised Its Premiums
As the threat landscape gets more complicated, you may soon find that your cyber risk insurer is upping your monthly fees or asking for additional cybersecurity measures from you. This is the perfect opportunity to shop around for your coverage. You may find that you can get more coverage for less through another provider. If you take the opportunity to reassess your risks, it may be an excellent time to expand your company’s coverage level.
Here at Integris, we have a referral program that offers a white-labeled insurance package that is available only to our clients. If you’re considering making cuts, I’d offer this advice: never go backward on your coverage levels. The threats will constantly increase, and so will your safety net.
#5— New Systemic Cyber Risks Emerge
Cyber risk insurers are very sensitive to new waves of risks. You could argue that one of those scenarios is playing out now with the rise of artificial intelligence. There’s never been a higher threat level than we have right now. Artificial intelligence can now write code, develop custom malware, and even write phishing emails in whichever language you choose. For hackers, the barrier to entry has been eliminated. Anyone with a computer and a Wi-Fi connection can now create hacks that used to require technical expertise to execute.
Additionally, hackers are targeting smaller and smaller businesses because they see them as easier targets. As new threats emerge and the average cost of a breach continues to rise, expect to see cyber risk insurers raise their prices accordingly. In our current business environment, it pays to plan on incremental increases with time.
#6—You Fail to Prevent a Serious Security Event
Sometimes, even the best cyber security protections fail against new and novel hacking attempts. In this case, I’m sorry to say you may be in a new rating class with your current cyber risk insurer. That may mean paying more for the same level of coverage you’ve been receiving. If you don’t already have cyber risk insurance, you may find it challenging to go insurance shopping when the worst happens.
This is all the more reason to ensure that your cyber security protections are as tight as possible and that your relationship with your cyber risk insurer is good.
Cyber Risk Insurance Is a Business Investment Most Companies Can’t Live Without. Make Sure You’ve Invested Appropriately.
The right cybersecurity coverage can keep your company safe in a world of AI-powered hackers. Yet, it can also be the key to proving your safe infrastructure and operations to all your business constituents–vendors, clients, investors, and more. It’s a very tangible part of your company’s reputation management in the digital age. Make sure you’re giving it the attention and the investment it deserves.
If you’re interested in exploring what Integris Cyber Risk Insurance can do for your company, we’d love to tell you more. Contact us to set up a free consultation.
