Cyber insurance is more necessary now than ever before—but it’s also harder to get. Following an influx of unprecedented ransomware attacks, insurers have imposed strict requirements on new customers. Learn how to meet current cyber liability insurance requirements and secure the best coverage for your business.
A few years ago, purchasing a cyber liability policy was relatively simple. In many cases, all you had to do was fill out a few questions, read through several quotes, and pick the best option. Now, you have to provide detailed information about your cybersecurity posture and pay a premium for coverage—if you can get a policy at all.
Why has it become so difficult to get covered? Cyber insurance companies are taking on more risk by promising financial assistance after increasingly expensive cyberattacks. The premium amounts they charged a few years ago can’t make up for that risk today.
If you want to purchase a policy today, you should expect to face several cyber liability insurance requirements, which can include:
- Access management controls: Cyber liability insurance providers want to ensure your company does everything possible to prevent unauthorized access to your network. They might require you to provide proof you restrict access to confidential information and critical systems.
- Multi-factor authentication: Employing a multi-factor authentication system is another way to show insurers your network isn’t vulnerable to a breach.
- Security training: Even with the most advanced cybersecurity controls, you can suffer an attack if an employee clicks a malicious link or downloads the wrong file. Insurers might require you to train employees to prevent these harmful mistakes.
There are two main types of cyber liability insurance your business might need:
First-party coverage protects your business from losses during and after a cyberattack. For example, your policy might pay to recover your information following a data breach, hire a public relations firm for crisis management, and reimburse your business for lost profits.
Insurance companies could end up paying millions of dollars for a first-party claim, which is why many have imposed cyber liability insurance requirements for these policies.
If a cyberattack on your company affects your clients, you may face lawsuits alleging negligence. Your third-party cyber liability coverage helps pay for lawsuit costs, settlements, and other legal fees.
Companies that store sensitive third-party information may have to meet several cyber liability insurance requirements before purchasing a policy. For example, you may have to supply proof of adequate security controls or restricted access to client files.
Before you jump through hoops to secure cyber insurance, you should make sure your cyber liability insurance provider can meet your needs. Here are a few questions to ask before purchasing coverage.
Depending on your business and network, you may need to purchase additional coverage to address your risks. These specialty insurance coverages might include regulatory fine and penalty coverage, social engineering fraud, or ransomware coverage.
Because of the hardened cyber liability insurance market, business owners may struggle to secure the amount of coverage they need. If your preferred carrier offers all the coverages you need but can’t meet your limit requirements, you may need to consider an excess cyber liability policy.
If you already have an incident response plan in place, it’s important to check if your insurance policy will fit into that plan. Some insurers may require you to choose a designated incident response team, which may not be your preferred team. Check with your potential cyber liability insurance provider to see if their cyber liability insurance requirements match your plan.
Are you struggling to get approved for cyber insurance or find coverage that doesn’t exceed your budget? The cyber insurance experts at Southpoint can help you exceed cyber liability insurance requirements. We can determine changes to your cybersecurity posture that will help you secure a policy, and our team members will negotiate with top carriers to meet your coverage needs.
Get in touch today to learn more about the types of cyber liability insurance we offer or request a quote.