Cyber-attacks are becoming more prevalent with every passing year. These digital threats are also growing in sophistication as hackers work out new ways of bypassing modern security protocols.
According to Statista, the cost of cybercrime is expected to reach over AUD$33 trillion by 2027. These rising costs have forced many companies to invest in cybersecurity insurance. Moreover, the cybersecurity insurance policy covers data loss, damage, and reputational costs resulting from cyber-attacks. This causes insurance companies to pay experts for investigations and network repair.
The surge in cyber-attacks has led to an increase in cyber security insurance costs. Australian companies spent around AUD$690 million on cyber insurance in 2022. That number is expected to rise by about 70% to AUD$1,170 million by the end of the 2024 financial year.
Fortunately, there are some hacks you can use to lower this ever-rising cost of insurance premiums. Read on to learn more.
How can you lower cybersecurity insurance premiums?
Before you learn how to lower the costs, what is cyber liability insurance? It’s an insurance policy that covers your company against expenses incurred in case of a cyber-attack.
Hacking can have a massive impact on the overall operations of a business. Apart from data and financial losses, these data breaches can also hurt a company’s reputation. Cyber insurance premiums shield businesses from such repercussions.
Here are some tips that can help you offset the cost of this cyber insurance coverage:
1. Employ strict cybersecurity policies
Reports show that 85% of data breaches have human aspects, which could result from team member negligence. That explains why many recent cyber-attacks have been through social engineering.
For instance, phishing attacks have been around for many years, yet they’re still quite successful. Of course, hackers have shifted from bulk emailing to targeted emailing, but employees still play a vital role in the success of these attacks.
The frequency and magnitude of these data breaches are why insurance premiums are rising yearly. Therefore, one way to lower your monthly payment is by implementing cybersecurity awareness for your staff. You can also conduct formal security awareness training for everyone and follow this up with a weekly or monthly email containing cybersecurity tips and tricks.
2. Implement multi-factor authentication
Multi-factor authentication (MFA) is an authentication technique that requires the user to provide at least two pieces of evidence. Usually, it’s the password and a one-time password (OTP) sent to the user’s email address or phone.
Having this as part of your company’s cybersecurity policies will show the insurer your commitment to cyber-threat alleviation. As such, you’re likely to enjoy lower cyber insurance costs. But how will you implement this in your company?
You can begin by marketing the idea to all your staff members. This is to make sure that everyone is on board with the new policy before you start introducing the changes.
Once all employees know your plans, start your deployment from top to bottom. Prioritise admin accounts because they’re usually the main targets in cyber-attacks. You can move down the ladder slowly until you get to the subordinate staff.
MFA can slow things down by adding an extra step to the authentication process. It’s up to you to simplify it by choosing seamless options. For instance, using biometrics or phone-based authentication apps instead of OTPs can reduce unnecessary friction.
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3. Conduct regular penetration testing
Penetration or pen testing is also known as ethical hacking. This is the process of simulating a cyber-attack while checking for vulnerabilities in a network. This is the best way of identifying any weaknesses that malicious actors can exploit in your digital systems.
Ethical hacking allows you to test the effectiveness of your company’s security protocols. Some of the things you should focus on are firewalls, intrusion detection systems, and antivirus software.
The main benefit of this process is that it reduces your risk profile from the insurer’s point of view. As such, you won’t have to pay high premiums since your chances of being attacked are low.
Make sure you hire an experienced and reliable cybersecurity partner. For one, they’re up-to-date with what’s happening in the field and new techniques that hackers are employing. This knowledge is crucial in identifying vulnerabilities and finding the best solutions to the problem.
4. Purchase as a package
Purchasing a single insurance policy from an insurer is more expensive than bundling several. Remember, the process requires processing and administration fees. Therefore, purchasing each policy separately will pile up these fees and make it quite expensive.
The best solution is to list all insurance policies and purchase them from one company. This can lower the processing fees significantly.
Also, you may qualify for a discount when you do more business with an insurance provider. Of course, such offers may come occasionally, but they can be beneficial.
It’s worth noting that many insurers today offer cybersecurity insurance coverage on top of their traditional products. So, check with your insurance provider before making your next move.
The security of your private data is paramount in this day and age. As such, you must invest in your personal and company’s cybersecurity to avoid unnecessary cyber-related losses. Consider the tips shared above and work with a reliable cybersecurity insurance company to help you maximize your cyber insurance premium.