Emerging Cyber Insurance Trends: What Businesses Should Know
Do you own a small or medium-sized business and wonder whether you need cyber insurance? Keep reading to discover this year’s most important cyber insurance trends and why commercial cyber liability insurance is more important than ever.
Important Cyber Insurance Trends
Cyber-liability insurance helps a business protect itself from the consequences of a cyber-attack, such as a data breach. These insurance programs cover expenses like legal fees, data recovery, and fines and penalties. Here are important trends to consider in the cyber insurance industry before deciding on a policy.
As essential components of cyber risk management, cybersecurity, and insurance protect your business from increasing threat actors. Several factors contribute to an increased demand for cyber insurance:
- Increased threat: The frequency of ransomware attacks and other cyber threats continues to accelerate year over year, and they’re becoming increasingly complex and difficult to combat. In addition, while hackers focused their attacks on larger companies in past years, SMBs are rising targets.
- Interconnectivity: Businesses of all sizes have an increased awareness of how every business connects to others in the digital age. An attack on one business makes others more vulnerable and decreases market stability.
- Compliance requirements: Many larger businesses now require their subsidiaries, affiliates, and suppliers to have cyber insurance as part of their contracts. Additionally, new government regulations require financial institutions of all sizes, even small tax firms, to have cybersecurity insurance, increasing demand.
Supply Chain Vulnerability
Cyber threats continue to focus on the supply chain as their primary target. Supply chains are attractive for hackers because an increase in vulnerable bottleneck points and the rapid and nearly universal deployment of digital products and management tools make them the most interconnected facet of the business world.
Because nearly every business has supply chain vulnerabilities, experts suggest viewing cyber resilience and insurance not as a burden but as an investment for a safe and thriving business.
One of the most universal cyber insurance trends is an increase in regulations, both from larger corporations and governmental jurisdictions. Many experts foresee upcoming legislation that bans ransomware payments from public entities, which (including the education sector) remain the least prepared against cyber threats.
While the industry needs more data, many experts believe preventing public entities from paying ransomware attackers would lower the frequency of attacks on the sector because threat actors won’t focus on an area lacking profit potential.
More Detailed Requirements
Emerging trends point to more detailed requirements and longer applications, which means reading the fine print of your policy has never been more important. While the standard requirements, such as multi-factor authentication, employee security training, and data backup, remain the same, more insurance companies are requiring details about these practices.
For example, instead of asking whether businesses have protections in place, providers want to know whether a company has tested these backups, which specific software it’s using, and other details they’ve determined can better protect against cyber-attacks. Some experts believe the requirements from some insurance agencies are becoming unreasonable and require information most SMBs can’t access.
While prices spiked in 2021, they’ve virtually leveled off for the foreseeable future. While a lull in ransomware attacks (and thus insurance claims) has played a big part in this leveling off, improved risk control and underwriting also contribute.
Insurance and financial advisors suspect the static prices are temporary, so now is the perfect time to lock in a policy before premiums increase again. No one expects prices will decrease.
Gilsbar Can Help You Harness Emerging Trends in Cyber Insurance
Emerging cyber insurance trends highlight the importance of cyber insurance, and with prices static, now is your best time to purchase a policy. Gilsbar can help you navigate the complex world of cybersecurity resolutions and business insurance.
To learn what we can do for your business, and for answers to further questions, click here.