5 methods to reduce cyber insurance premiums

Cyber-attacks and data breaches have become a significant threat to businesses, leading to potential financial losses and reputational damage. To mitigate these risks, many organizations opt for cyber insurance coverage. 

Sophos found in its 2022 State of Ransomware Report that 83% of US organizations surveyed have ransomware coverage, and of those who had suffered a ransomware attack, 98% had some or all the costs covered by their insurer.

However, obtaining a comprehensive cyber insurance policy can be costly, with premiums varying based on several factors. Fortunately, there are effective strategies you can implement to reduce your cyber insurance premiums while bolstering your cybersecurity posture. 

What are cyber insurance premiums?

Cyber insurance is a specialized type of coverage designed to protect businesses against financial losses resulting from cyber incidents. Premiums, in this context, refer to the amount businesses pay for the insurance policy. These premiums are determined by several factors that insurers consider when assessing your organization’s risk profile. 

Some key factors include:

Business industry and size: Industries that are more susceptible to cyber-attacks, such as finance and healthcare, generally have higher premiums. Additionally, the size and annual revenue of your business can impact the premium amount.

Security measures: Insurers evaluate the security measures you have in place to protect your digital assets. A robust cybersecurity posture can lead to lower premiums.

Data handling practices: The way you handle sensitive customer data plays a role in determining your premiums. Implementing strong data protection measures can help reduce the cost.

Incident response capabilities: Insurers assess your ability to respond effectively to a cyber incident. Having a well-defined Incident Response Plan can positively influence your premiums.

5 ways to reduce your cyber insurance premiums

Develop and implement a cybersecurity framework

Creating and implementing a comprehensive cybersecurity framework is a crucial step in reducing your premiums. This framework should include policies, procedures, and guidelines for safeguarding your digital assets. It should address areas such as network security, access controls, and incident response protocols. 

By having a well-documented and comprehensive cybersecurity framework in place, you demonstrate to insurers that you are proactive in managing cyber risks. This can lead to lower premiums as insurers perceive your organization as a lower risk.

Implement a zero trust policy

Zero trust is an approach to cybersecurity that emphasizes the principle of “never trust, always verify”. With a zero trust architecture, every user and device attempting to access your network or data is subjected to thorough verification, regardless of their location or previous access privileges. Zero trust strategies establish multiple layers of security controls and strict access policies.

By implementing zero trust strategies and policies, you create multiple layers of defense that significantly reduce the likelihood of a successful cyber-attack. Insurers recognize the value of this approach and may offer lower premiums as a result.

Develop an Incident Response Plan

In the event of a cyber incident, having a well-prepared and tested Incident Response Plan (IRP) is essential. An IRP outlines the steps your organization will take to minimize the impact of a cyber-attack and recover quickly. It includes activities such as threat detection, containment, eradication, and recovery. Having a well-developed IRP demonstrates your preparedness and ability to respond effectively to cyber threats.

By developing an effective IRP, you demonstrate proactive risk management, which can positively influence your premiums. Remember to regularly review and update your plan to stay ahead of emerging threats.

Backup data daily

Data loss can be disastrous for any organization. Implementing a daily data backup policy ensures that your critical information is regularly backed up and stored securely. Make sure to choose reliable backup solutions and periodically test the restoration process to ensure data integrity and availability.

This reduces the financial impact of data breaches and ransomware attacks. Insurers often offer lower premiums to organizations that demonstrate effective data backup practices.

Invest in regular employee cyber awareness training

Employees are often the weakest link when it comes to cybersecurity. Investing in regular cyber awareness training for your employees is a proactive measure that can significantly reduce the risk of cyber incidents. By educating your staff about common cyber threats, phishing scams, and best practices for secure online behavior, you empower them to become your organization’s first line of defense. Insurers recognize the value of employee training and may reward organizations with lower premiums for their efforts in cultivating a cyber-aware workforce.

Strengthen your cybersecurity posture with expert assistance

Reducing your cyber insurance premiums doesn’t mean compromising on your organization’s cybersecurity. By prioritizing cybersecurity and taking proactive steps to mitigate risks, you will not only reduce the likelihood of cyber incidents, but also position your organization as a responsible and reliable entity in the eyes of insurers 

The cybersecurity specialists at BCS365 can assess your current cybersecurity posture, recommend actions to take and tools to implement to increase your security maturity, and manage your entire environment for optimal performance and secured systems. This will reduce the risk of cyber incidents, and increase your cyber insurance options. Talk to them today and find out more.