With the rise of remote workforces and employees accessing the business network and database with personal devices, we’ve seen a sharp increase in both the amount of hacking attempts from cyber criminals and the amount of successful cyberattacks. When you look at how few companies actively train their employees in cybersecurity and how elaborate hacking ploys can be, this isn’t very surprising news. Everything from social engineering to malware to breaching means exorbitant costs for business owners, which is why many are looking into cyber insurance policies.
Even though the vast majority of cyber incidents are preventable, it’s probably not something you would want to stake your business on. For this reason, cyber insurance has become increasingly popular with SMBs. Cyber insurance policies vary widely depending on what industry you serve, how many employees you have, how much data you access and store, and many other factors, but insurance companies universally accept proper cyber hygiene principles and you can receive better rates if they believe your business operates with minimal cyber risks.
What Do Cyber Insurance Companies Look At?
Cyber insurance companies look at your business to determine how likely it would be for you to be breached, and if you were breached, what the damages would be. Key factors for your rate include:
1. Your Employee Headcount
The amount of employees that access sensitive data is one of the most important factors because the more employees that have access to it means more opportunities for a cybercriminal to breach your database.
2. Your Client Headcount
Cyber insurance policies come with 3rd party coverage, which will cover the cost of legal fees, client damages, PR damages, and client security failure. Because of this, cyber insurance companies look at who they would have to consider 3rd party.
3. How/Where You Store Data
Most cyber insurance companies prefer to see offsite or cloud based backups, because they cover the cost of downtime, so companies give better rates if you can mitigate your own downtime quickly.
4. How Much Sensitive Data You Store
Companies with large amounts of personal data end up with higher rates because cyber insurance covers data loss and if someone steals their data, the potential damage is much greater.
5. Software/Hardware Utilized
Cyber insurance companies will look at your hardware because servers and USPs are recommended to be upgraded every 3 to 5 years. Since they cover downtime, they will want to make sure your equipment is up to date and less likely to fail.
6. Your Written Cyber Security Policies
Realistic, written cybersecurity policies and protocols show cyber insurance companies that if you were to face a cyber incident, your team would know how to mitigate damages as soon as possible, which could help you score a better rate on your policy.
7. If You’re Paired with an MSP
Cyber insurance companies give substantial discounts to business that are partnered with an MSP, as the MSP’s purpose is to ensure the cybersecurity of the business it’s partnered with.
While there are many other factors that can be considered depending on your business, these 7 things are key for cyber insurance companies when it comes to determining the price of your policy.
How You Can Get You Better Cyber Insurance Rates
Since the factors that cyber insurance companies look at to determine your rate are simply your risk factors, you can find a discounted rate by minimizing your cybersecurity risk. There are many things you can do to minimize your cybersecurity risks, but here are some that we highly recommend doing:
- Installing firewalls
- Setting up email spam filters
- Installing antivirus software
- Limiting employee account privileges
- Setting up MFA and authenticator tokens
- Make formal cybersecurity policies and plans
- Enforcing complex passwords that change periodically
- Encouraging employees to use password managers
- Using offsite backups or the cloud
- Regularly backing up all data
- Employee cybersecurity training
- Automatically pushing software updates
- Using VDIs for employees on personal computers
- Partner with an MSP
How KLH Can Get You Better Cyber Insurance Rates
As an experienced MSP, KLH knows how to secure your SMB to minimize your cybersecurity risk, helping you score better cyber insurance rates. If you want to learn more about cyber insurance and what they cover, read our article Is Cyber Insurance Worth It. To find out more about how KLH can secure your business and help you get better cyber insurance rates, contact us at 952-258-8200 or firstname.lastname@example.org.