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Cybersecurity Insurance Is The Last Resort—Not A First Line Of Defense

Do you think cybersecurity insurance will be your 100% reliable safety net? Think again—it is just one small part of an effective cybersecurity defense.

You may think that simply by investing in cybersecurity insurance, you’ll be covered no matter what type of data breach you suffer.

But that’s not really how it works.

Cybersecurity insurance is difficult to qualify for, rarely pays out the way business owners assume and, frankly, is no replacement for comprehensive cybersecurity.

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What Is Cybersecurity Insurance?

Often referred to as cyber liability or data breach liability insurance, cybersecurity insurance is a type of stand-alone coverage. It’s designed to help businesses cover the recovery costs associated with any kind of cybersecurity incident including:

Breach And Event Response Coverage

A very general and high-level form of coverage, this covers a range of costs likely to be incurred in the fallout of a cybercrime event, such as forensic and investigative services; breach notification services (which could include legal fees, call center, mailing of materials, etc.); identity and fraud monitoring expenses; public relations and event management.

Regulatory Coverage

Given that a range of organizations (such as The Securities and Exchange Commission, the Federal Trade Commission, the Department of Homeland Security, and more) have a hand in regulating aspects of cyber risk in specific industries, there are usually costs that come with defending an action by regulators

This covers the costs associated with insufficient security or “human error” that may have led to a privacy breach. Examples may include an employee losing a laptop or e-mailing a sensitive document to the wrong person.

Liability Coverage

This type of coverage protects the policyholder and any insured individuals from the risks of liabilities that are a result of lawsuits or similar claims.

Put simply, if you’re sued for claims that come within the coverage of the insurance policy, then this type of coverage will protect you.

Cyber Extortion

This type of cybercrime event is generally a form of a ransomware attack, in which a cybercriminal keeps encrypted data inaccessible (or, alternatively, threatens to expose sensitive data) unless a ransom is paid.

Coverage of this type addresses the costs of consultants and ransoms, including cryptocurrencies, for threats related to interrupting systems and releasing private information.

Does Cybersecurity Insurance Offer Complete Protection Against Cybercrime?

A common misconception is that a cybersecurity insurance policy is a catch-all safety net, but that’s simply not the reality.

Without a comprehensive cybersecurity strategy in place, a business may not qualify for a policy in the first place. Furthermore, in the event of a hack, a business may not qualify for full coverage if its cybersecurity standards have lapsed, or if it can be found to be responsible for the incident (whether due to negligence or otherwise).

The core issue is that as cybercrime becomes more common and more damaging, insurers will become more aggressive in finding ways to deny coverage. It’s in the interest of their business to pay out as little and as rarely as possible, which means the policies will tend to rely on a series of complicated clauses and requirements with which covered parties have to comply.

A key example of this is when Mondelez International was denied coverage for the $100 million of damage they incurred from the NotPetya attack. Their insurer, Zurich Insurance, cited the obscure “war exclusion” clause, claiming that Mondelez was a victim of a cyberwar.

This is not an isolated incident. As discovered by Mactavish, the cybersecurity insurance market is plagued with issues concerning actual coverage for cybercrime events:

  • Coverage is limited to attacks and fails to address human error
  • Claims are limited to losses that result directly from network interruption, and not the entire period of business disruption
  • Claims related to third-party contractors and outsourced service providers are almost always denied

All of this goes to show why business owners need to look carefully at the fine print of their cybersecurity insurance policy and ensure their cybersecurity standards are up to par. No one should assume they’re covered in the event of a cybercrime attack—after all, for every $1 million paid in premiums, insurance companies only pay out $320,000 in claims.

It’s important to understand that the way you manage your cybersecurity can directly affect the coverage and premiums you qualify for. The more robust your cybersecurity posture is, the better you’ll do with carriers. Your investment can potentially return on lower insurance expenses.

Don’t Overlook Proactive Cybersecurity Protection

As important as cybersecurity insurance is, don’t forget that it’s simply one part of an effective cybersecurity defense. You also need to protect your organization proactively.

After all, did you know that, on average, there’s a cyber attack every 39 seconds?

It could be a ransomware infection. It could be a phishing email. It could be one of the many other methods cybercriminals employ today.

The point is that cybercriminals have an extensive arsenal of weapons to attack with—are you hoping your lone firewall will be enough to keep your business safe from all of them?

Boston HelpDesk Will Protect You With Multi-Layered Cybersecurity

The Boston HelpDesk team understands that a single layer of protection simply won’t cut it—we’ve been in the business long enough to know that a simple cybersecurity defense will soon lead to a data breach.

Our team provides cybersecurity and technology services for organizations like yours—we are available to help you develop a robust cybersecurity defense, minimizing the chance that you’ll ever have to make a claim on your cybersecurity insurance.

Our Comprehensive Cybersecurity Framework

Network Security

  • Enterprise-Email Security: Managed Anti-spam/Anti-virus, Encryption & Archiving for Email
  • Enterprise-Endpoint Security: Anti-Virus/Anti-Malware, Application and Device Control, Patching and Monitoring
  • Enterprise-Data Protection: Full Disk, Email, and Device Encryption and Data Loss Prevention with Central Policy-Based Enforcement, Multi-Factor Authentication

Perimeter Security

  • Enterprise-Gateway Security with Managed Firewalls:
    • Inspection
    • Gateway Antivirus
    • IDS/IPS
    • DPI
    • Sand-boxing
    • Web Content Filtering
    • VPN

Staff Education

We educate staff members with ongoing security training, making sure to keep them informed and reminded of proper security best practices, such as strong passwords, how to identify phishing emails, and what websites to avoid.

We utilize managed security awareness training to educate employees about cybersecurity, IT best practices, and regulatory compliance.

This training provides customized cybersecurity awareness campaigns, training, support, and education for employees to learn how to avoid phishing attacks, identify malware behaviors, report suspected security threats, and follow IT policies and best practices.

Monitor and Measure Security Success

Through collection of metrics, regular auditing, and reliable reporting, security programs can achieve continual improvement and keep up with the changing security environment.

Security Risk Assessment and Compliance Review

BHD performs an ongoing risk assessment and review of compliance standards as part of our security program.

This assessment and review is to identify security strengths and weaknesses based on industry compliance frameworks and to align IT and security processes with the National Institute of Standards and Technology, Cybersecurity Framework v1.1, (NIST CSF), and best practices.

Penetration Testing

Yearly testing of your networks and applications to determine their ability to withstand an attack using techniques employed by cybercriminals. We attempt to enter your network or test specific applications used by your business.

Vulnerability Scanning

On-premise and cloud-hosted, external and internal vulnerability scanning to identify, report and remediate security vulnerabilities in systems and the software that runs on the network.

Vulnerability scanning is targeted to meet the requirements of both security-conscious clients as well as HIPAA, GxP and ISO27001 compliance.

Intrusion Detection Systems (IDS)

Comprehensive host-based intrusion detection across multiple platforms to detect unauthorized file system modification and malicious behavior, which helps to maintain compliance with security framework requirements.

Don’t Make Any Assumptions About Your Cybersecurity

Insurance is just one component of an effective cybersecurity posture. Don’t assume it’ll protect you from any type of disaster.

Invest in your cybersecurity upfront to ensure you never have to depend on your insurance.

You can start improving your cybersecurity and get the insurance policy you need by getting in touch with the Boston HelpDesk team.