CYBER INSURANCE | 5 MIN READ
Though cyber insurance can provide significant financial coverage in the event of a cyber attack or data breach, the costs to maintain coverage can quickly add up. Keep reading to learn six tips on how your business can reduce your cyber insurance costs.
[Quick Summary] Here are 6 tips to lower your cyber insurance costs:
1. Work With Your Broker
2. Minimize Your PII Volume
3. Stay Compliant with Data Privacy Regulations
4. Consider A La Carte Policies
5. Reduce Your Exposures
6. Hire Managed IT Services
For more insight into each tip, keep reading!
Work With Your Broker
Insurers know that every organization and industry has specific needs in a cyber insurance policy. This means that you can and should work with your broker to build the right policy for you.
Work with your broker to see if you can lower your premium in exchange for a higher deductible. This can lower your month-to-month costs.
If you wish to pay less up-front costs in the event of a cyber attack, see if your broker can work with you to raise your premium in exchange for a lower deductible.
Depending on your history of cyber attacks and likelihood of having one in the future, you can configure your premium and deductible as you see fit.
Minimize Your Volume of Personally Identifiable Information (PII)
Personally Identifiable Information (PII), which includes anything from social security numbers to medical records, is private consumer data that has many laws in place to protect it. If your company experiences a data breach and this information is taken, your company could experience a host of negative consequences ranging from a fine to a customer lawsuit.
Cyber insurance companies know that PII poses a financial risk to them, seeing as the more PII that's taken during a data breach will cost the insurer more money to recover their policyholder's network and recoup any damages.
Risk assessments, which are used to determine premiums, use PII volume as a key factor. This is because if your company handles large volumes of sensitive data, the risk is higher that, in the event of a data breach, more customer information will be taken.
If you can reduce the amount of sensitive data your company stores, you can possibly reduce your premium.
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Stay Compliant With Data Regulations
Data regulations such as HIPAA and PCI DSS were instituted to protect the privacy of sensitive consumer data such as social security numbers and credit card information. Different industries prioritize following different data regulations, but many non-compliance penalties are the same.
While businesses are usually motivated to follow these regulations out of a fear of receiving fines or lawsuits, they should also be positively motivated out of a desire for a lower cyber insurance premium.
Staying compliant with data regulations, especially PCI DSS, shows your insurer that your company is committed to protecting consumer data and securing your network, which could potentially be grounds for a lower premium.
To stay compliant with data regulations, follow industry leaders to stay on top of any changes that your business should know about. Additionally, consider quarterly reviews of your cyber security protocol to find room for improvement.
RELATED: Can Businesses Be Sued for Data Breaches
Consider A La Carte Policies
Cyber insurance policies can usually be customized for all-inclusive coverage of a wide range of scenarios or be built a la carte.
All-inclusive coverage may protect against everything from a small network outage to a large-scale ransomware attack, while a la carte models allow you to choose a few scenarios that you think your company needs coverage for.
A la carte policies can save your business money since your coverage extends to a smaller amount of scenarios. If there are certain cyber threats that you think are unlikely of harming your network, consider removing coverage for them from your policy.
When analyzing an a la carte policy to maximize cost efficiency, pay close attention to the deductible and compare it to the cost of any past cyber attacks your company has had.
For instance, if your company has experienced multiple small attacks costing $10,000 or less to resolve but your deductible is $15,000, then you may want a policy that only covers costly events such as ransomware attacks, seeing as it wouldn't be worth it to pay the deductible for small attacks.
In an a la carte policy such as this one, your premium may be cheaper and your deductible will give you more bang for your buck. If your company is prone to small-scale cyber attacks, paying an expensive deductible and filing a claim every time this happens will only hike your premium moving forward.
RELATED: 6 Questions to Ask Before Buying Cyber Insurance
Reduce Your Exposures
Insurance companies use your exposures to evaluate how likely it is that you'll have to file a claim. Exposures are also used to determine your premium. By lowering your exposures, you show your insurer that you pose less of a financial risk to them, which could persuade them to lower your premium.
One way to reduce your exposures is to invest in strong cyber security. A secure network can prevent cyber attacks, lessening the need to file a claim.
The less claims you file, the more of a chance that your insurer will refrain from raising your deductible, seeing as claims history is a big factor in deductible costs.
Upgrade Your Hardware and Update Your Software
When you periodically upgrade your hardware and keep software up-to-date, you ensure that security gaps are patched and your network security doesn't stay stagnant.
Software updates typically include the latest security patches that can close network gaps you didn't even know you had.
While hardware upgrades can quickly add up, if you have a Managed Service Provider handling your network security, you can have periodic hardware upgrades worked into your contract.
Educate Employees
Employees are your weakest link when it comes to a secure network − all it takes is a single employee clicking a link in a phishing email for a hacker to have access to your network. Consider educating employees on cyber security best practices.
When building a cyber security education course, be sure to include a password policy with tips on creating a secure password, as well as tips on how one can avoid falling for a phishing scheme.
Some third-party companies can even conduct phishing tests to see which employees fall for a fake phishing scheme. Then, those who fall for the trap are immediately sent to an online cyber security seminar.
RELATED: How to Keep Data Safe and Secure [5 Quick Tips]
Hire Managed IT Services
Cyber security insurance helps protect your business' financial health in the event of a cyber attack or data breach lawsuit. However, cyber insurance doesn't provide any technical protection to prevent network breaches and cyber attacks from happening in the first place.
A Managed Service Provider (MSP) manages your cyber security for you by implementing a variety of tactics to keep your network secure and maintaining a secure environment. This can prevent cyber attacks and data breaches, which will reduce your need to file a claim with your insurer.
Your deductible increases, in part, due to the amount of claims you file. When an MSP keeps your number of claims from increasing, this can keep your deductible from increasing, as it shows that your company continues to be a low risk to your insurer.
While an MSP can reduce your claims, hiring one can also reduce your premium. Hiring managed IT services shows your insurer that you're committed to reducing your exposures and protecting your network, which could persuade them to lower your premium.
An MSP protects your network by installing various hardware and software to keep your network up-to-date with the latest cyber security tactics. Additionally, an MSP can assist you in creating a password policy and list of cyber security best practices for your organization to ensure that employees don't fall for phishing schemes or leave your network open to breaches.
The right MSP will keep your insurance costs low while protecting your network from intruders.
Cyber insurance is increasingly becoming a top-of-mind consideration for businesses. Customizing a policy that fits your needs can help you manage any financial burdens that arise if your company experiences a cyber attack or data breach.
RELATED: What is a Managed Service Provider?
While cyber insurance is becoming an increasingly integral expense for organizations across the board, the costs can quickly add up.
Keep the tips above in mind if you want to build a cyber insurance policy while minimizing costs. For more cyber security tips and topics, follow our blog!
