In Part 1 of this four-part series, we showed you why now is the time to implement a cyber security program. In Part 2, we talked about finding a cyber security provider. In Part 3, we discussed how to get the most from a program and how Trava stacks up against other providers. Here, we conclude with a topic that some companies may know little about: cyber insurance.
You’ve engaged a cyber security risk manager to assess your vulnerabilities. You’ve worked with them to mitigate those risks. So why do you need cyber insurance?
Think of it the same way you would think of homeowner’s insurance: You do all you can to eliminate fire hazards. But something you never thought of or considered unlikely could still occur—so you get insurance.
Assessing on a regular cadence and mitigating by priority are essential. And so is cyber insurance. Hackers are developing new ways to steal your data or hold your system for ransom all the time, so, unfortunately the likelihood of a cyber attack is pretty high. You want to protect your assets in the event of a cyber event by transferring residual risk to a third-party by way of cyber insurance.
88% of small businesses believe they are at risk of a cyber attack. Yet, depending on the data source, as many as 80% of them don’t carry cyber insurance. Why not?
They don’t understand it. It’s expensive. They’re ineligible without a solid cyber risk management program in place. These are a few reasons.
Currently, the cyber insurance market is in the midst of a huge transformation. In the past, this industry was relatively unknown, but now it is a well-known option and the industry has subsequently begun to gain sudden traction. Due to this rapid growth, insurers weren't prepared, didn't have the historical data to set accurate premium rates, and, due to the continuing uptick of cyber incidents, payouts quickly exceeded the resources to pay for them.
[Additional resource: Watch this fireside chat among insurance industry experts for more about the past, present, and future of cyber insurance.]
This became a larger issue as the number of ransomware attacks on small businesses exploded—Information Security Buzz pointed out that more than half (55%) of ransomware attacks now involve companies with fewer than 100 employees. As a result, the cyber insurance market is going to evolve to become more restrictive about what is and isn’t covered. It’s likely in the future, many SMBs may find they have more difficulty obtaining cyber insurance and/or getting their policies renewed.
That being said, if your business is more proactive about its cyber security practices, such as having a comprehensive cyber risk management program in place, you’ll find it might be easier to qualify for a policy or obtain better insurance coverage premium rates. In the future, as this insurance niche begins to become more standardized, insurance companies are going to want to mitigate their own risks so the number of claims doesn’t exceed what the companies are bringing in through premiums.
Trava is bridging the gap between cyber risk management and insurance with a data-driven approach that allows SMBs to have a greater chance of getting a cyber insurance policy that is right for them, and at an affordable premium, and ensuring the annual renewal of that policy. Taking the guesswork out of cyber insurance.
[Additional resource: Read this article on Proactive cyber security measures every small business should take to qualify for cyber insurance.]
Trava is committed to a holistic cyber risk management program that connects the dots between cyber risk assessment (understanding where the business is at risk), mitigating risk, and protecting financial assets with data-driven cyber insurance (transferring residual risk) powered by Trava’s groundbreaking insurance analytics platform.
Download Trava's complete buyer's guide for comprehensive cyber risk management.
Stay safe from cybersecurity threats, Small Business Administration, 2020, retrieved Jan. 6, 2022 https://www.sba.gov/business-guide/manage-your-business/stay-safe-cybersecurity-threats#:~:text=According%20to%20a%20recent%20SBA,t%20know%20where%20to%20begin.
From research study and report by Selective Insurance and Appalachian State Univ. https://www.prnewswire.com/news-releases/selective-survey-finds-majority-of-small-businesses-lack-cyber-insurance-coverage-301247484.html