How To Reduce Cyber Insurance Premiums

As cyber insurance demand rises, insurers are becoming stricter.

Canadians may face higher cyber insurance premiums, limited coverage, and deductibles.

Despite this, cyber insurance remains crucial.

Follow these steps for policy renewal to secure approval and lower costs.

Cyber insurance premiums
Reducing cyber insurance premiums: Photo source (Indeed)

Is cyber insurance worth the cost?

Cyber insurance is now essential due to technology’s vital role in organizations.

Cyber insurance is essential due to its coverage, including legal advice, digital forensics, crisis management, and defense against claims.

Ransomware attacks are rising, especially on small businesses, and 98% of Canadian organizations faced attacks in 2021.

With increasing government regulations and fines, cyber insurance is a wise investment.

Follow these steps for approval and cost reduction.

Step 1: Implement cyber security best practices

Robust cybersecurity practices will make your organization more attractive to insurance companies.

Our 11-point cyber hygiene checklist is a helpful guide to the type of practices your insurance company will be looking for.

The bullets below are a quick summary:

  • multifactor authentication for all users
  • endpoint detection and response software
  • network security monitoring
  • regular employee cybersecurity training, including simulated attacks
  • mandatory password changes and complexity practices
  • software and hardware update policies
  • restricted admin-level access
  • a comprehensive data map
  • a data retention policy
  • off-site data back-ups
  • a privacy compliance program

Affordable measures, especially for small businesses, can prevent cyber losses.

A study by a major insurer showed that simple steps like multifactor authentication and regular data backups could have averted most losses.

Organizations lacking basic cybersecurity are denied insurance at renewals.

Step 2: Have some skin in the game

Organizations mitigate market risks through deductible adjustments and accepting lower limits.

This enables coverage for significant claims while dealing with minor incidents.

Crucially, implementing cyber hygiene practices is vital.

Allocate premium savings towards cybersecurity enhancements.

Additionally, it’s advisable to consult your broker regarding deductible or retention adjustments to optimize your coverage.

Step 3: Carefully complete your application

Renewal procedures might include a lengthier application or additional inquiries.

Additionally, a security expert could assess your cyber preparedness.

The outcome of this evaluation, which typically spans 3-6 months, significantly impacts your coverage and premiums.

To ensure a successful renewal, it’s crucial to adhere to broker and insurer requirements, engage the appropriate individuals, and provide substantial evidence showcasing your commitment to cybersecurity.

Conclusion

The cyber insurance market is toughening; organizations must prove they’re a good risk.

Following these steps ensures understanding of needs, even if affordable insurance remains elusive, showing proactive efforts for protection.

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