Today's rapidly evolving threat landscape makes underwriting cyber risk difficult. Cyber insurance applications are being evaluated more carefully because of the dynamic nature of cyber threats and the potential financial consequences of a data breach.
A report by Delinea, a US-based cyber security company, found that 28% of small businesses were turned down for cyber insurance vs. larger enterprises. A lack of security protocols led to the denial of coverage. 64% of businesses were required to purchase additional IT and/or cybersecurity solutions to receive coverage. Four key factors contributing to the difficulty in securing cyber insurance include:
- Assessment Complexity: Cyber risks are inherently complex, and assessing an organization's vulnerability requires a comprehensive understanding of its cybersecurity measures. Insurers may request detailed information about your cybersecurity policies, procedures, and infrastructure.
- Risk Profiling: Insurers often conduct thorough risk profiling to determine the level of risk associated with a particular business. Your industry, data sensitivity, and existing cybersecurity measures play a crucial role in How you are assessed.
- Underwriting Standards: Given the evolving nature of cyber threats, insurers regularly update their underwriting standards. This can lead to shifting criteria and requirements, making it essential for businesses to stay proactive in enhancing their cybersecurity posture.
- Incident Response Preparedness: Insurers are increasingly interested in understanding an organization's incident response plan. Demonstrating a robust plan for identifying, containing, and mitigating cyber incidents can positively influence insurers' perceptions.
At Quick Intelligence, we specialize in helping businesses navigate the complexities of cyber insurance. Our team of experts can assist you in preparing a comprehensive application, addressing key risk factors, and implementing measures that align with industry best practices. Don’t delay, contact us today.