With the ever-growing threat of cybercrime presenting serious risks for many businesses, it’s no wonder that many business owners are turning to cyber insurance as a way to mitigate this threat. Even just a few years ago, cyber insurance was considered a luxury or an unnecessary expense, depending on who you asked. But things have changed quickly, and with the average data breach costing $4.24 million, cyber insurance has exploded in popularity as part of a disaster recovery plan.
And cyber insurance isn’t just for major international corporations. Recent reports demonstrate that even small and mid-sized businesses experience at least one cyber attack every year. Unfortunately, most business owners feel their current security measures are insufficient to thwart any attempted attack, driving the increased interest in cyber insurance. These policies jumped from only 2.1 million in 2016 to over 4 million in 2020, according to the National Association of Insurance Commissioners.
Cyber insurance can offset some of the risks of digital attacks as part of a larger disaster recovery plan. For many companies, it is part of a larger overarching risk management plan. But having cyber insurance can force you to evaluate your regulatory compliance and current cybersecurity defenses. By maintaining compliance, you can secure your digital assets, maintain coverage, and even lower your premiums. A few strategies to maintain compliance include:
- Work with experts. Maintaining compliance with data security regulations can be hard. There is a patchwork of state, federal, and even international laws that come into play, including but not limited to the General Data Protection Regulation (GDPR), the Health Insurance Portability and Accountability Act (HIPAA), and the Federal Information Security Management Act, among others. Only someone well-versed in these laws and provisions can assess your defenses and identify potential compliance issues.
- Select the right policy. It can be difficult to help some people understand the business value of cyber insurance, but the reality is that one successful attack could destroy your business. Even a policy with lowered claim limits is better than no policy at all. You can work with an insurance specialist to find the right amount of coverage that works for your budget.
- Enforce policies and procedures. Security policies are essential, especially those related to how employees use devices and technology. After all, most cybercrimes often involve human error at some point. Therefore, it’s essential to have good password and security policies and enforce them.
- Don’t skip the training. Taking time away from productive tasks to train employees is hard. But it’s a lot more cost-effective than being the victim of a successful cyber attack. Security awareness training can lower an organization’s risk of attack by up to 70%, making it well worth the time investment.
- Create a compliance team.Laws and regulations are constantly evolving to meet emerging threats. Compliance isn’t something you can address once and then feel confident that you will remain compliant. It’s very beneficial to have a team that can help identify new ways to maintain compliance and coordinate the efforts across departments. They can work within a process to identify risks, assess the threat level, and determine a plan to minimize the threat and the risk of putting your disaster recovery plan into action.
- Evaluate your backup system. One of the key reasons ransomware attacks are so successful is that many companies do not have a process to regularly back up their systems, which means they will be unable to work without it. Having a backup won’t protect you from all of the fallout of an attack. However, it could mean your business can still function, which is a huge benefit, especially for companies in critical industries like healthcare.
- Develop a cybersecurity response plan. These plans are time-consuming to create, and it’s tempting to think that you won’t need one if you do all of the other recommended actions. But that would be a dire mistake in a successful attack. These plans communicate to your team how important security is for business continuity. Additionally, should your company go through an attack, you will be glad to have a roadmap for a rapid response. Responding quickly is one of the best ways to minimize the extent of the attack.
Cyber insurance is a key part of any disaster recovery or cybersecurity response plan. While it doesn’t prevent an attack, it can give you peace of mind that an attack will have less impact if it were to occur. And the policy will force you to evaluate your current security measures. For more information about disaster recovery and incident response plans, contact Sagacent Technologies today.
Sagacent Technologies offers technology management and support, including proactive/preventative maintenance, onsite and offsite data back-ups, network and security audits, mobility solutions, disaster planning, and emergency business resumption services. The company serves clients of 10 to 150 employees within the Silicon Valley region.