What do you look for in a cyber policy as a risk manager? What are some of the key factors to consider in a cyber risk assessment?
Cyber threats have risen in prominence in recent times, and the COVID-19 pandemic’s rapid move to remote working has amplified the requirement for firms to properly manage cyber risk.
Although there are many strategies to manage cyber risk, cyber insurance is a critical element. However, because the cyber industry is still in its initial phases of development, knowledge is scarcer than with more known lines.
Before the pandemic, cyber liability was already set to become the most important type of coverage for a business,” Luis Gazitua, principal of JAG Insurance Group, told Corporate Risk and Insurance. “With the uptick in digital dependencies as companies transitioned to remote work, cyber protection became increasingly prominent as different organizations and companies fell victim to hacks and Zoom bombs.”
Cyber liability will become the most essential protection necessity as firms shift to hybrid work settings, according to Gazitua.
Commercial cyber responsibility must be integrated into business planning to minimize data breaches and other cybercrimes, he said, as more people and businesses save data to the cloud. Cyber security is evolving at the same rate as technology, but it is clear that the cyber liability market has emerged as one of the most important insurance markets.
Gazitua presented many ideas about what to look for in a cyber policy to help risk managers navigate this new arena. Because risk managers need to be aware that the amount of money paid for a cyber insurance premium changes based on the type of organization, examining a cyber policy is comparable to evaluating most insurance policies, according to Gazitua. He emphasized that, unlike other types of insurance, cyber deductibles are determined by a timescale, usually 72 hours, rather than a financial amount. In addition, the type of cyber insurance a business should obtain is very dependent on its industry.
There are various options for firms to lower their cyber liability exposures besides purchasing cyber insurance. Education is one of the most crucial factors.
Companies must educate personnel on cybersecurity risks, such as spotting a phishing email and genuine correspondence intended to retrieve passwords or distribute malware, to avoid exposures, according to Gazitua.
Furthermore, using two-factor authentication to improve current security systems is a simple and free solution that firms may use to decrease hacking. Backup digital files, making sure all operating systems are up to date and having an incident response plan in place are some more suggestions. Although these measures may appear simple, they are critical in preventing attacks as cybercriminals strive to exploit the weakest.
Partnerships between insurance companies and cybersecurity organizations have been more widespread in recent years, according to analysts. This, according to Gazitua, is advantageous and gives greater convenience to businesses. Cybersecurity companies help in curbing some of the challenges facing insurance providers.
“Wouldn’t you want your cyber security and cyber liability all in one sweep if you’re running a small business?” he asked. Cyber security businesses can also examine a company’s present capabilities, making it easier for insurance agents to submit claims. As a result, it is a mutually beneficial alliance that will benefit all parties involved.