With the rise of data breaches and cyberattacks, more companies are turning to cyber liability insurance for added protection.

While cyber liability insurance has been around for many years, it’s only recently started growing in popularity. Today’s cyber liability insurance market is a $3.5 billion industry, more than doubling in less than ten years. That’s growth at 9% per year with no signs of stopping.

Why are Companies Turning to Cyber Liability Insurance for Protection?

Ransomware

Attacks are being felt in every industry, every sector. According to Sophos’s “The State of Ransomware 2022” report, 66% of organizations have been hit with a ransomware attack in the last year. That’s up from 37% in 2020.

With every attack comes new approaches with increased complexity. We might be growing exponentially with our technological advances, but hackers are utilizing them too.

The best way to protect your data is to back it up. Then do it again. You can’t do it enough. If you’ve been working with a weekly or daily backup system, now is the time to ramp it up even more. Frequency and redundancy are the keys to surviving and overcoming any attack.

Malware

While companies are getting more diligent in their efforts to thwart criminal behavior with their anti-malware measures, cybercriminals are just as active at getting what they want.

The State of Email Security report for 2022 shows malware activity is spreading more broadly through employees by as much as 75%.

This increase is for several reasons. Hackers are getting more sophisticated in their approach. Employees are also more distracted as they move their offices from a work environment to working from home.

Data Breaches

Thousands of phishing attacks are launched every day. It’s still one of the top ways hackers get in. Yet according to IBM’s 2022 Cost of Data Breach Report, stolen or compromised credentials are equally as common and take the longest to identify.

Protection starts with a better-trained employee. A good training program teaches how to recognize targeted phishing campaigns, spot malicious links, and avoid risky attachments.

Training should always be an essential part of your cybersecurity strategy. Employees are one of the weakest links. But even the best-trained employee can still fall victim to a well-planned attack. That’s where cyber liability insurance steps in.

The Benefits of Cyber Liability Insurance

Cyber liability insurance protects businesses against financial losses caused by ransomware, malware, phishing attacks, data breaches, and more. If your business stores sensitive information online or on a computer, you should carry at least some cyber insurance coverage. Some insurers offer cyber liability insurance as an add-on to a business owner’s policy, but you can also purchase this coverage separately. It’s protection for when you need it most.

Understanding the IT Requirements to Get Cyber Liability Insurance Coverage

It’s important to note that cyber liability insurance does not replace the need for cybersecurity. Cybersecurity is the practice of protecting systems, networks, and programs from digital attacks whereas cyber insurance is generally covers fees and expenses involved after a malicious attack is made.

The fact is without a comprehensive cybersecurity plan in place, your organization’s infrastructure and data could be left vulnerable and you may find it next to impossible to obtain cyber insurance without it.

There are unique criteria that companies must meet to be eligible for coverage and maintain it annually depending on your insurance provider and your specific policy. This criteria continues to evolve with changes within the cybersecurity risk landscape and may vary slightly by provider, but typically four types of security controls are required:

Multi-factor Authentication (MFA)

MFA protects data or applications by requiring a user to present two or more credentials to verify user identity at the time of login. These credentials typically consist of something you have like a token, something you know like a password, and something you are like a fingerprint. By enabling MFA, it is much more difficult for cyber criminals to hack into applications with stolen passwords.

Security Awareness Training

Nearly 90% of successful breaches are caused by human error. Continuous security awareness training is important to educate staff on proper cyber hygiene and the ways to identify cyberattacks that may be encountered via email and the web. It is recommended that companies use continuous training techniques versus only training employees once or twice a year to ensure cyber best practices stay top of mind.

Encrypted Backups

In the event of a systems crash, natural disaster or security event, businesses need encrypted backups to minimize downtime. With backups hosted both on-premises and in a secure cloud location, rebooting a single server or an entire office can be done seamlessly with the click of a few buttons.

Endpoint Detection and Response (EDR)

As hybrid and remote work become increasingly common in business, companies must protect their infrastructure at their endpoints (computers, laptops, servers, etc.). With Endpoint Detection and Response, you can monitor, detect, and mitigate any threats regardless if your employees are in the office or working remotely.

TPx can help you enable a comprehensive cybersecurity plan and put the right security measures in place to keep your infrastructure protected. Not sure how secure your business is today? Take advantage of our free cybersecurity risk calculator.

The first step in defending against cyber criminals is knowing your risk. Talk to a TPx representative today to learn how we can help you become defensible.