The rationale for cybersecurity insurance is the fact that the risk of a successful cyber attack can never be fully or completely mitigated.
The struggle between hackers and defenders is a never-ending war, and in any war, there is no such thing as safety.
We've said this many times, and it bears repeating, because to fail to grasp this fact is to remain in harm's way.
Further, the requirements for effective cybersecurity are always changing and growing.
The vulnerabilities of our customers and clients are also in constant flux, which means government regulations and best practices never remain the same.
What all of this means is that just having cybersecurity still, sadly, isn't enough.
Businesses have to be ready for the next "state of play."
That is, to be prepared for new conditions.
To be unready for new conditions is to run the risk of being denied cybersecurity insurance renewal.
Now to our point.
Being aware of the requirements of cybersecurity insurance renewal is an absolute necessity if one wishes to maintain any kind of true security against cyber attacks.
So, our purpose here is to discuss the need for cyber insurance renewal and how to remain qualified for renewal, even in the face of shifting ground.
The state of cybersecurity depends greatly on trends and factors affecting it, as does the chances that a company's cybersecurity insurance can be renewed.
Fortunately, your cybersecurity insurance provider wants your renewals to be approved, since their bottom line depends on it.
That means the best cyber insurance carriers will offer you all the information and support you need to renew your policy in a reliable and timely fashion.
Here are a few examples.
More small and medium-sized businesses need cybersecurity insurance.
With more attackers and more various viable attacks looming on the horizon, more businesses than ever are under threat.
Chief among the targets are not the high-dollar mega-corps with deep pockets.
Rather, the smaller, presumably less well-defended targets are.
Because the process is more complicated, there are more ways to be misled.
For this, we can only recommend working exclusively with the most reputable and experienced carriers out there, as well as pouring over the fine print with a fine-toothed comb.
In 2022, the international cyber insurance market was appraised at just over $13.3 billion and is projected to grow to $84.6 billion by 2030.
In addition to the reasons mentioned above, this growth is also because most traditional forms of insurance do not cover damage inflicted by cyberattacks.
Further, the impact of COVID-19 drove many resources and services into the digital space, and this has given hackers more and larger targets to take aim at.
According to Fortune Business Insights, "[...] growing threats to data are spurring businesses to leverage cyber insurance coverage.
At present, small and medium-sized businesses are being attacked in greater and greater numbers.
This factor is expected to fuel the adoption of new cyber insurance policy holdings by SMBs."
There are at least a dozen well-known, high-quality, reputable, and longstanding insurance providers that also offer cyber insurance.
For our purposes here, we have listed the top five companies that offer insurance packages that are well-suited to the needs of modern SMBs.
This leading insurance provider can dedicate up to $1 million in coverage online with coverage including media liability, ransom payments, and data recovery.
Specializing in serving healthcare providers, The Doctors Company can help you navigate cybersecurity issues in this heavily regulated industry.
Hartford Steam Boiler specializes in serving law firms, who have always handled the sensitive information of their clients.
Its reputation and range limits make it a leader in the company's area of specialization.
As a leader in providing cyber insurance for non-profits, CyberPolicy excels at providing functional coverage to entities working within a tight budget.
With their A++ rating from AM Best, Travelers gives you access to cybersecurity experts for free as well as cybersecurity training, and other services.
Because cybersecurity is an ever-shifting landscape within which exists a never-ending arms race between white and black-hat hackers, the data security needs of businesses are also constantly changing.
Within this landscape, cyber insurance providers must expect those they serve to do their best to protect themselves.
This is analogous to a homeowner who wants to invest in home insurance.
To do so, he will need to secure the home against fire, armed robbery, and other common threats to property.
If the homeowner does not take these steps, few insurance companies would offer him coverage for anything but ridiculously large premiums.
But unlike home insurance, the threats to corporate data are constantly growing.
Therefore, the requirements of cyber insurance providers must also change and grow.
The risks to businesses are greater than ever, especially SMBs.
Software companies lose millions when hackers steal their work.
Security researchers say that medical devices can be hacked and commandeered by hackers, posing a serious threat to healthcare providers and patients.
Financial services firms have experienced massive losses from glitches that created digital back doors, allowing bad actors to access the financial and personal data of their clients.
Of course, these are just a few examples of what can and is happening every day.
Fortunately, the tools we have at our disposal to protect against threats are also growing in scope, power, and effectiveness.
Companies that provide cyber insurance have access to some of the best tools available and understand best practices for the industries they specialize in.
This means you'll be in good hands when you work with a top-quality insurer.
Plus, it's in their best interest that you do qualify for a cyber insurance renewal.
For a start, cyber insurance premiums have leveled off, as mentioned.
But this won't last. The cost of this type of protection can be expected to increase by the end of this decade, if not sooner.
This is both good news and bad news.
For early adopters, this is good news.
It means you can lock in premiums now that will be unavailable to those who remain unconvinced.
It also means that the security that your clients and customers will enjoy will be hard to find among your competitors.
At the end of the day, that security value is the main thing you gain.
The expected change in price means policyholders will also gain exclusivity.
But as we have discussed, part of the price you'll pay for this exclusivity of value is the increasing difficulty of renewing your policy.
Yes, the standards for good cybersecurity will rise and become tougher to meet.
But keeping up is in your best interest, and your insurance provider's interest as well.
The process for applying for cybersecurity insurance today is well known.
It looks something like this;
Getting your renewals to go through will require that you maintain these measures and document that you do so.
In the future, the quality and vigilance in how you achieve these tasks may need to increase.
Your logs may need to be more detailed, show a higher frequency of checks, and have more robust routines.
In addition to higher quality assurance for your security policies, you may be asked to invest in stronger security software, better hardware strategies, and even more advanced IT people.
While some of this is conjecture, it certainly would not hurt your chances of getting renewed.
Depending on your industry, needs, risk profile, and the insurer you work with, you can expect the timeline for renewals to vary.
Things to watch for include rate increases, ransomware sublimits, coinsurance, and supplemental applications.
In most cases, the renewal timeline will be about once a year.
But this may change.
With the rate and severity of insurance losses on the rise, carriers are looking to implement strategies to mitigate their risk.
Some such strategies may include rate increases up to 100%.
Not to worry, however.
There will be plenty of options out there for you to choose from.
In addition to the checklist in the last section, you should have all the following in place when applying for or expecting renewal:
While it's important to understand that cyber insurance is the only certain protection against a successful attack on your sensitive business data, renewals will be more costly and difficult in the coming years.
The good news is that this bottleneck in accessibility means those who have it will remain competitive while others do not.
By picking the best cyber insurance provider for your industry, you will gain a sure partner to help you keep up with regulations, guide how to secure renewals and remain secure well into the next decade.
Sources