Modern threats like phishing, ransomware and data breaches cast a dark cloud over businesses across sectors. For most bad actors, the goal of an attack is financial. As Proofpoint noted in the 2023 State of the Phish report, 30% of businesses that endured a successful attack experienced a direct monetary loss, such as a fraudulent invoice, wire transfer or payroll redirection. That is an increase of 76% year over year.
A cyber insurance policy can protect you from the financial losses caused by cybersecurity incidents and data breaches. And when businesses pair cyber insurance with the prowess of Proofpoint solutions, they can build a formidable defense strategy. In this blog, we’ll go over some best practices for choosing and managing you cyber insurance policy so you can protect yourself from risk.
Actions that cyber criminals monetize
Our research for the latest State of the Phish report shows that the three most common consequences of a cyber attack are:
- Data breach (44%)
- Ransomware infection (43%)
- Account compromise (36%)
Notably, cyber criminals can monetize all these actions.
Most common results of successful phishing attacks. (Source: 2023 State of the Phish report from Proofpoint.)
Just one cybersecurity incident can cost tens of thousands of dollars. So, it’s easy to understand why insurers see these incidents as too costly to cover in their general liability policies. But with cyber insurance, your business has a tool to help manage risk.
Why cyber insurance can be a vital financial safety net
While firewalls and endpoint protections remain vital, the truth is that a level of residual risk always exists. No matter how fortified your security is, breaches can happen due to ingenious adversaries, human error or just unfortunate circumstances.
This is where cyber insurance comes to the rescue. It is the safety net that catches your business when your defenses fall short. It can help you cover costs like ransomware payments, legal fees, and costs associated with crisis management and revenue loss.
In the graphic below, we can see how often cyber insurance covered losses from ransomware attacks among those surveyed for our 2023 State of the Phish report.
Nearly three-quarters (73%) of businesses with cyber insurance policies said their insurers paid at least some of their ransomware-related losses. (Source: 2023 State of the Phish report from Proofpoint.)
Cyber insurance best practices
Now that we’ve covered why cyber insurance can be a vital financial safety net, let’s look at some essential best practices for cyber insurance. These measures can help your business become more effective at managing cybersecurity risks.
Find an expert and ask for support and guidance. Specialized brokers are your allies in the intricate world of cyber insurance. Insurers vary in risk appetite, claim acceptance rates and expertise. Brokers have an in-depth grasp of this landscape, and they will assess your options meticulously. They will help ensure that the policy you choose is the right fit for your industry, size, risk profile and more.
Be prepared for a rigorous assessment. Today, insurers want more insight into your company’s security protocols and controls before they issue a cyber insurance policy. So preparedness is key. Be ready to provide evidence, like external audits, penetration test results and compliance certifications to insurers. If you implement access controls that insurers deem vital, such as multifactor authentication (MFA) and privileged access management (PAM), it may help to reduce your premiums.
Closely examine coverage scope. Coverage specifics vary globally. But you will find that most cyber insurance policies cover a portion of losses from ransomware attacks and expenses linked to crisis responses. You need to have a thorough understanding of the breach scenarios your policy does or does not cover. Take note of any exclusions. Also, be sure to scrutinize services like breach investigation support, legal counsel, public relations assistance and customer identity protection. Understanding how these costs are managed—whether they come out of the comprehensive claim limit or as separate payouts—will help you to tailor your cyber insurance strategy. You can ensure your strategy aligns with your company’s needs and enhances your overall cybersecurity resilience.
Actively collaborate with your insurer. Invest in building a collaborative relationship and trust with your cyber insurer. (Consider doing this even if there is no active claim.) Insurers possess a wealth of experience from helping their clients recover from various breaches, making their insights invaluable. Arrange for your incident response team and the insurer’s forensic experts to interact during response plan trials. The forensic experts can share their perspective and offer response recommendations. You could ask them to:
Share timely threat intelligence
Participate in simulated exercises
Provide expert advice on incident response strategies
Contact your insurer immediately in the event of a breach. Rapid communication with your insurer is a must during a suspected breach. Industry best practice is for a business to engage with their insurer within the first 24 to 48 hours after a cybersecurity incident. This can lead to dramatic improvement in your chances of mitigating damage and reducing recovery costs. Early engagement of the insurer broadens the range of options available to contain the situation, too. The insurer’s vested interest lies in helping your business to recover as quickly and fully as possible.
Securing your future with cyber insurance
Investing in cyber insurance can be a wise move for risk management. Armed with the right policy and a provider that matches your company’s distinct risks, cyber insurance can help to ease the financial impacts of an inevitable data breach. By taking a proactive approach to cyber insurance planning, you can help secure your company’s future.
Are you ready to fortify your cyber risk management strategy? Explore how leading-edge cybersecurity solutions from Proofpoint can complement your cyber insurance efforts. Contact us today to schedule a consultation with our experts.