Strategies for Minimizing Cyber Risk Liability for running business
Cyberattacks are growing in prevalence and sophistication, and so are the damage costs associated with them. According to the 2022 Cost of Data Breach report by IBM and Ponemon Institute, the average damage cost of a data breach has reached a record high of USD 4.35 million in 2022. This has also led the market for cyber insurance to explode over the last few years, as a rise in high-price attacks has driven more companies to want to offset the potential cost to their business.
In response to increasing breach damage costs, a growing number of US businesses are partnering with cybersecurity insurers, who, in turn, respond to increasing service demands by inflating their cyber insurance premiums.
In this article, you will read about:
What Does Cyber Insurance Cover?
Top 4 Factors Impacting Cybersecurity Risks
10 Ways U.S. Businesses Can Lower their Cyber Insurance Premiums
How Rainbow Secure can help?
Most businesses have insurance policies protecting their assets to shield them from liability, but these general liability policies most often focus on the physical assets and usually do not cover the fallout from a cyberattack. Cyber insurance is insurance that specifically protects your organization from liability stemming from a data breach or some other type of cyber incident. According to VisionGain Reseach Inc. Cyber Insurance Market is set to grow at a CAGR of 21.4% by 2031.
What Does Cyber Insurance Cover?
Cyber insurance can cover many of the costs you would incur after a cyber breach. These days the most common one is ransomware. Cyber insurance can cover the ransom from a ransomware attack, but policies can also cover other associated costs such as:
- legal fees
- crisis management consulting
- cost of notifying your customers of a breach
- financial losses suffered while your business is shut down following an attack
- forensic investigations are necessary to understand the extent of a breach
- getting your network back up and running post-incident
Much like any other type of insurance you can buy, cyber insurance companies offer a variety of policies with varying levels of coverage depending on your organization’s risks.
Top 4 Factors Impacting Cybersecurity Risks
As an individual’s health status impacts their insurance premium, in the same manner, a business’s cybersecurity posture impacts its cyber insurance premium.
The greater the cyber threat exposure, the greater the associated cyber insurance costs to justify coverage. Conversely, the better a business’s cybersecurity program, the cheaper the cyber insurance premium.
An organization’s overall cybersecurity risk can be broken down into four primary dependencies:
- Regulatory Compliance – Regulatory compliance standards such as NIST, HIPAA, and PCI DSS stipulate exemplary IT security standards to mitigate cyberattack success.
- Degree of Third-Party Vendor Risks – Partnership with third-party vendor service combines their attack surface with yours, essentially transferring their security vulnerabilities to you. The greater your vendor network, the greater the potential for third-party breaches.
- Business size – The larger the business, the greater the cybersecurity threat. A larger employee pool offers more opportunities for phishing attacks, increasing the potential for a successful cyberattack.
- Degree of data sensitivity – Highly sensitive data lure cybercriminals because it can be used for leverage in exploitation attacks, such as ransomware attacks.
Once the inherent risks are determined, the insurer will also evaluate the measures you’re taking to protect yourself from cyberattacks. Of course, the insurer and the insured both know there is no such thing as a guarantee against attack, hence why insurance exists in the first place.
10 Ways U.S. Businesses Can Lower their Cyber Insurance Premiums
Establishing a resilient cybersecurity program is the best method for reducing your cyber liability insurance premium.
By implementing the following strategies, your cybersecurity program will reflect the information security characteristics cyber insurers look for when evaluating a business’s risk profile.
1. Multi-Factor Authentication (MFA) is a Must
Multi-Factor authentication is now a mandatory security requirement for most cyber insurance providers.
According to Microsoft, almost 99.9% of attacks can be blocked with Multi-Factor Authentication.
But outside of cybersecurity, MFA is often regarded as a nuisance, leading to productivity disruptions and poor user experience. These inconveniences can be reduced by using smart Multi-Factor Authentication from Rainbow Secure which adjusts to your use case, reduces cyber liabilities of a business from stolen credentials, and improves productivity, and enhances user experience.
2. Follow the NIST Cybersecurity Framework
Insurance underwriters like to see a paper trail of evidence that shows the steps taken to implement robust cybersecurity protections. One such source of a paper trail with recommendations and actions to follow is the NIST Cybersecurity Framework. The NIST Cybersecurity Framework is the most widely recognized framework for reducing cybersecurity risks.
3. Engage External Expertise
Cybersecurity is a specialized task. Only the very largest organizations have the resources to have the required skills in-house. Engaging with specialized external cybersecurity companies is a way to get the experts needed. These companies have skilled staff on board to provide guidance and expertise to organizations of all sizes about how to bolster their cyber defense strategy and deal with cyber insurance companies at renewal time.
4. Have Demonstrably Secure Backups
Backups are the ultimate safety net to allow recovery from a destructive cyberattack. While backups will not prevent the attack, they will allow the recovery of IT systems to an operational state at a time before the attack occurred. Cyber insurers want to see that this is possible. There are two significant features of the backup systems in place that insurance providers will look for:
- Air-gapped backups – Ransomware actively looks for backup systems on the network to infect and destroy backups. Ransomware criminals don’t want organizations to have a way to bypass paying a ransom. Recent backups must be on systems that are air-gapped from the production network. This can be done via physical separation, with network segmentation (if configured correctly), and possibly with backups on immutable storage systems that any ransomware attack will not be able to encrypt. Talk to your IT infrastructure and backup software supplier about how to provide this air gap for backups or get advice from Critical Insight experts.
- Regularly tested restore procedures – “Untested backups are no backups at all!” An IT industry cliché, but true. Restoration from backup needs routine testing to ensure that the data is retrievable in any disaster scenario.
5. Implement a Zero Trust Architecture
With a zero-trust model, a user’s identity and permission settings are continuously – verified even after network access is granted, especially when they attempt to access highly sensitive assets. If you have a remote workforce, cyber insurers will look for evidence of an endpoint protection solution that is best implemented through a zero-trust model.
A zero-trust model is characteristic of a cybersecurity program that’s adapted to the modern security challenges created by digital transformation. When choosing a zero-trust model, it’s best to align with a standard trusted by government entities – the NIST 800-207 standard for Zero Trust.
6. Implement a Vendor Risk Management (VRM) Program
In 2021, 33% of all data breaches were caused by compromised third-party vendors, and a 2022 study revealed that 82% of surveyed CIOs believe their software supply chains are vulnerable to cyberattacks.
Gartner predicts that 45% of global organizations will experience a supply chain attack by 2025, a 300% increase from 2021.
The fragility of the third-party vendor attack surface was made very evident with the recent Log4Shell crisis placing millions of third-party services at a heightened risk of compromise.
A Vendor Risk Management program includes a risk assessment policy for continuously tracking security risks across the third-party threat landscape. A VRM is essential for industries most vulnerable to supply chain attacks, such as healthcare.
7. Design an Effective Incident Response Plan
How people within an organization and their external security providers respond to a developing cyberattack often has a large impact on how damaging and costly the attack turns out to be.
Everyone in an organization is part of the defense. Therefore, everyone must have the awareness training mentioned above, but they should also know what to do in the event of anything suspicious happening.
Easy-to-follow incident response plans for both users and the IT team will need to be in place to minimize ongoing attack damage. Cyber insurers will want to see these plans and that everyone is aware of them and knows what to do.
8. Implement Cybersecurity Awareness Training for Staff
Humans will always be the weakest link in every cybersecurity program. Surveys show that most successful cyberattacks that deploy ransomware have at their root a human user who clicked a malware link, visited a malicious website, or divulged information they shouldn’t have.
Cyber insurers understand how susceptible staff is to getting swindled by cyberattackers, so they’ll be very pleased to find evidence of a cybersecurity awareness training policy.
9. Follow a Regular Penetration Testing Schedule
Regular penetration tests demonstrate the resilience of your security defenses. Cybercriminals are continuously cultivating their tactics to evade modern cybersecurity developments and defenses. A pen testing schedule reflects an understanding of the need to constantly adapt cybersecurity efforts to the evolving threat landscape, a mature mindset cyber insurer will highly appreciate.
10. Vulnerability Management
Cyber insurance providers will want to see vulnerability management procedures in place to deploy security and operating system updates and patches quickly. Not just for endpoint devices but also for servers, network equipment, perimeter protection, and anything else that has access to the network and is a potential target for cyberattack.
How Rainbow Secure can help?
Right amount of data and system access to the right person or role at the right time is the key to organizations being able to use digital tools and platforms to serve the customer base and stay compliant.
Next Generation Rainbow Secure platform is a modern identity and single sign-on solution for your business across on-premises and cloud environments. It’s backed by an experienced team of cloud and security experts, years of innovation, and partnerships with leading cloud platforms. Rainbow Secure is a Leader in Smart and Secure Digital Solutions that work for you.
Secure Workforce & Customer Login Use Authentication Plug-in by Rainbow Secure to secure workforce and customer logins. In this plug-in, you get a multi-dimensional password, passwordless login solutions with AI monitoring, Risk Analytics, and location fencing.
Secure Data and its Backups We provide Cloud-based data vault and data archive solutions backed by Microsoft Azure and secured by our authentication plugin and industry best practices to give you ransomware protection and help with data governance and disaster mitigation.
Database Security We provide technical consulting services to Secure Databases in the cloud and on-premise. You get the best protection for your data in databases using native and third-party security tools.
Meet Compliance Requirements: Use Authentication Plug-in by Rainbow Secure with your business application and in SSO (Single Sign-on) and meet industry standards and compliance regulations such as NIST, ISO, FTC, SOX, SOC2, CMMC, CMMI, HIPAA, PCI, and others.
Securely communicate and Collaborate: Use Secure Business Email by Rainbow Secure and get protection against account takeover, phishing, ransomware, and automated login cyber frauds. In this email, you get options to send encrypted emails, single sign-on with Office 365, and Google, and 1 TB one drive storage.
Connect Business applications: Get one unified login using Rainbow Secure Single Sign-On
Manage User Onboarding / Offboarding using Rainbow Secure IAM
Verify User using Smart Multi-factor MFA
Do you have more questions about how we reduce cyber risk liability for your business? Contact us today. Email us at Hello@rainbowsecure.com
