Cyber Insurance Rates Are Increasing in Cincinnati….Why?
- The severity and frequency of cyber attacks are growing.
- Cyber insurance carriers are introducing stricter requirements and becoming more selective about who and what gets covered.
- Cyber insurance carriers are raising premiums and lowering coverage limits to reduce their risk.
- Working with a partner experienced with cyber insurance applications can help you get the coverage you need at the best possible terms.
Cyber insurance has been available for about 20 years. This type of insurance policy covers losses due to cyber-related crimes. Cyber insurance helps offset the costs of responding to and recovering from cyberattacks.
The growing severity and frequency of cyberattacks have led to more organizations looking for cyber insurance. According to the U.S. Government Accountability Office, businesses purchasing cyber insurance rose from “26% in 2016 to 47% in 2020.” While the demand for cyber insurance increased during this period, the costs to insurance companies as a result of cyberattacks nearly doubled.
While more and more organizations are looking for insurance against cyber attacks, premium rates and access to policies are changing rapidly. What is going on? Why are the insurance companies changing tactics, and what can you do to get coverage?
Why Are Cyber Insurance Rates Increasing in Cincinnati?
Cyber insurance keeps getting more challenging for businesses to purchase. The requirements increase yearly as insurance companies pass more risk back to the business.
Over the past several years, large-scale attacks have emphasized the potential for catastrophic financial damages businesses face from cybercrime. For instance, the recent Colonial Pipeline ransomware attack disrupted gasoline distribution, causing shortages in the Southeastern United States. In response to the increased risk, insurance companies limit their exposure to these losses.
Why is this happening? The insurance companies are tired of being the bank for criminals, and they’re fighting back. The insurance questionnaires went from three to ten pages or more in just over a year. Insurance companies are trying to find the difference between companies that get hacked and those that don’t.
What Can You Do to Protect Your Business?
As the demand for cyber insurance for all organizations has increased, so has the uncertainty about the market. As a result, it’s become more challenging for insurance companies to price cyber risk and to make the desired coverage available.
Cyber insurance costs are related partly to the frequency, severity, and costs of cyberattacks, which have all been increasing. As a result of the uncertainty surrounding cyber threats, insurance premiums significantly increased, and insurance companies have become more selective about who and what gets covered.
Many insurers have reduced coverage limits and increased premiums, especially for high-risk organizations and industries, such as academic institutions, healthcare organizations, and public sectors. As a result, it can be challenging for many organizations to keep up with increased demand, tighter terms, rising premiums, and lower coverage limits.
So what can you do to ensure your business can obtain and keep the cyber insurance coverage you need?
Insurance industry professionals advise organizations with cyber insurance and those considering obtaining coverage to plan in advance and begin the application process as soon as possible. By starting the process early, companies can better identify existing security gaps and work to solve the issues.
At 4BIS.COM, we’ve identified several steps all businesses should take. Following these tips will increase your chances of securing and keeping a cyber insurance policy while ensuring you receive the most attractive rates and coverage possible.
Be Honest on the Questionnaire
Honesty is critical to properly completing the application process and getting the best possible policy for your business. When communicating with your insurer, be clear about your organization’s setup, security protocols, and breach history. If you do not have a system in place, then say so. If a process is required and is currently not in place, the underwriter will tell you and give you time to implement it.
Being honest on the questionnaire will help you secure adequate coverage and reduce the risk of your policy being voided. If you file a claim, the insurer will audit your business to find any way not to pay. If the carrier discovers that you were dishonest during the underwriting process, they may deny your claim and void your policy.
Develop a Security-First Posture
It is much easier to strengthen your company’s security by developing a security-first posture than worrying about insurance compliance. Applying for cyber insurance can be complicated, and it’s vital to have a partner experienced with cyber insurance underwriting. At 4BIS.COM, our clients can say yes to most insurance requirements without making any changes. Utilizing our expertise makes adding additional controls easier than starting from scratch. You also get the added benefit of lowering your cyber risk.
Prepare in Advance
Even if your firm hasn’t taken adequate steps to reduce your cyber risk, going through the cyber insurance application process will help identify security deficiencies. If an item is on the questionnaire, it will most likely be required a year later. Therefore, making a plan to implement additional controls ensures that you won’t be surprised next year.
Understand Your Risk
Understanding your risk is probably the most important step. For example, do you know if your business bank account is locked? What data do you have that is valuable to a criminal? Are your employees enabling and furthering cyber attacks?
Before you start the application process, you must speak with your IT management team and any vendors you work with to collect accurate data. It’s vital to quantify the data on your network and get a precise estimate of how much personally identifiable information, including employee data, you have.
The insurance companies are gathering this data and saying they no longer want to carry a risk. So get a cyber security risk assessment to answer these questions to understand and manage the cyber risk you have in your business.
Prepare For Your Cyber Insurance Application in Cincinnati With 4BIS.COM
At 4BIS.COM, we are here to help you cut through the quagmire that is modern IT and make your company as secure as possible. Our cyber security experts can help you find solutions for your cyber security risks. Our team will protect your network and data while helping to ensure that you meet the stringent requirements of cyber security coverage. Contact us today to learn more about how we can help you obtain the cyber insurance coverage you need for your business.