The Costs of Protecting Cyber Networks Could Double in 2023
The costs of protecting cyber networks could soon double as cybersecurity’s importance increases amidst the growing cyber threat. The rise of digital technology has made businesses increasingly reliant on computer systems and the Internet for their day-to-day operations. It has given them a weak point and made them more open to cyberattacks, which could devastate them financially.
Cyber liability insurance is the best way to protect your business from such attacks. However, the cost of this type of protection is rising rapidly and could double by early next year.
Factors That Impact the Cost of Cyber Liability Insurance
There are many reasons for the increased cost of cyber liability insurance. Among these are:
Higher Premiums
Insurers understand better the risks associated with cyber-attacks and data breaches. As a result, they are charging higher premiums to cover these risks.
Reduced Coverage
Since the early days of commercial insurance, companies have tried to limit their liability by capping the amount they would pay for claims. However, the ever-growing cost of cyber-attacks means that the usual limits are no longer adequate. Cyber networks can only handle so much.
As a result, insurers are reducing the coverage they offer. It leaves many firms unable to purchase the insurance they need to protect themselves. Ultimately, it leaves cyber networks at a higher risk.
Increased Underwriting Rigor
There are more cyber incidents than ever, and thus more pressure for underwriting companies to purchase cyber insurance. It is mainly because insurers have paid out large settlements. After all, their cyber networks were suffering major data breaches.
To mitigate their risks, insurers have become more thorough about practicing due diligence on potential policyholders. Besides getting detailed information on a company’s current security posture, insurers are also eager to know about incident response plans and the history of data breaches.
How to Enhance your Business’s Eligibility for Insurers
An excellent way to ensure your insurer eligibility is to show them you’re serious about protecting your data. You can do this via the following steps:
- Educate your staff on cyber risks and proper handling of company information
- Split your network, so there is isolation from the critical systems to the public access points.
- Test your backup and recovery processes regularly.
- Implement strong access controls, including two-factor authentication, end-point protection, restricted administrator privileges, and patch management.
Takeaway
The financial toll of a data breach can be significant. Direct expenses involve notifying customers, providing credit monitoring and other services, and investigating the incident. There are also indirect costs, including loss of business, damage to the company’s reputation, and regulatory fines.
Cyber liability insurance can help cover these costs, but it isn’t cheap. Insurers are also becoming more selective about which companies they will cover and are raising rates for those they deem high risk.
About Daniels Insurance, Inc.
At Daniels Insurance, Inc., we have a unique understanding of the risks that businesses like yours face on a regular basis. With the backing of our comprehensive coverages and our dedication to customer service and quick claims resolution, your business will be fully protected. For more information, contact us today at (855) 565-7616.