In honor of Cybersecurity Awareness Month, we want to shed light on the common misconception that threat actors only target larger organizations and small and medium-sized enterprises (SMEs) are too unimportant to be in the crosshairs of threat actors. However, that couldn’t be further from the truth. Threat actors don’t discriminate, as research shows that nearly 50% of cyberattacks are aimed at SMEs. The reality is that cyberattacks can devastate businesses of all sizes. Still, SMEs have smaller budgets to better protect themselves than larger organizations, so some believe SMEs are low-hanging fruit and easy prey for threat actors. That’s why cyber insurance should be a critical component of SMEs’ cybersecurity strategies. In this blog, we’ll cover the benefits of having a cyber insurance policy.
Before we dive in, let’s briefly define cyber insurance. Cyber insurance is a type of insurance policy that helps businesses protect against losses due to cyberattacks or data breaches. It covers many incidents, including ransomware attacks, business interruption, and liability claims from customers or third parties affected by the cyber incident.
*If you have a cyber insurance policy, please review your coverages and exclusions, as each policy varies in these areas.
Now, let us get into the good stuff!
Simply acquiring cyber insurance can improve an organization’s overall cybersecurity posture. Cyber insurance providers often require policyholders to meet certain security requirements and best practices, such as implementing Multi-Factor Authentication (MFA), developing an incident response plan, having a strong password policy, and more. Insurance providers will often provide resources or guidance to implement stronger security measures if those measures are not in place. This helps foster a proactive approach to cybersecurity and reduces the likelihood of a cyber incident, which can lead to lower insurance premiums over time.
Another benefit of cyber insurance is the financial support it provides. Cyberattacks can be costly and quickly add up, which is why SMEs should consider cyber insurance, as it can help mitigate the financial impact of a cyber incident. The average incident cost for SMEs is $455k, according to the 2022 Claims Study conducted by NetDiligence. For organizations with limited resources or cash flow, the financial impact of a cyber incident could be detrimental, potentially leading to bankruptcy or closure. This is unsurprising as a cyber incident not only impacts your organization financially, but your reputation, data, and customer confidence are also at stake. Cyber insurance can alleviate some of those stresses, covering the costs, including legal fees, public relations, and IT forensics, helping organizations recover quickly and minimize financial losses.
Lastly, cyber insurance provides a plethora of resources and expertise beyond just the policy. Policyholders often overlook this or are not aware that this is included. With Cowbell, you are engaging in a partnership, so you have access to our team of cybersecurity experts who can assist in implementing best practices, identifying security gaps within your organization, developing an incident response plan, complimentary cyber awareness training, and much more. In addition, you have access to our Cowbell Platform, which houses our Cowbell Insights and Cowbell Factors™. Cowbell Insights are derived from Cowbell Factors™, and they provide helpful guidance for policyholders to improve their risk profile by offering recommendations to address identified security weaknesses from their internet-facing assets. Cowbell Factors™, on the other hand, are proprietary risk ratings that compile in real-time an organization’s cyber risk profile. They present an up-to-date view of an organization’s risk profile compared to Cowbell’s risk pool of more than 36 million accounts across the U.S. and U.K. (and growing).
In conclusion, cyber insurance provides many benefits and peace of mind in today’s cyber landscape. It offers an additional layer of protection that mitigates the financial and reputational risks that result from cyber incidents. Also, securing cyber insurance strengthens the overall resilience of an organization’s cybersecurity posture and helps safeguard its long-term sustainability.