Ransomware Damage Claims Driving Insurance Hikes
source link: https://securityweekly.com/2022/01/12/ransomware-damage-claims-driving-insurance-hikes/?amp%3Butm_medium=rss&%3Butm_campaign=ransomware-damage-claims-driving-insurance-hikes
Go to the source link to view the article. You can view the picture content, updated content and better typesetting reading experience. If the link is broken, please click the button below to view the snapshot at that time.
Ransomware Damage Claims Driving Insurance Hikes
Deb Radcliff January 12, 2022
The costs of cyber insurance policies are rising exponentially while underwriters are tightening the rules around who qualifies for cyber insurance, and at the same time, insurer capacity is constricting dramatically. The numbers are all over the place, but the latest statistics from the Council of Insurance Agents and Brokers reported a 25.5% increase in cyber insurance costs.
Not surprisingly, the rise in cyber insurance costs is mostly attributable to a tidal wave of ransomware damage claims hitting insurers over the past two years.
Larger organizations are absorbing most of this price increase, but they are also driving up the costs for coverage to smaller businesses by demanding higher payouts against their losses, according to Jim Goldman CEO and cofounder of Trava Security, which specializes in cyber risk management and insurance assessment automation.
“Up until two years ago, cyber insurance was incredibly cheap. Since then, the costs have doubled, tripled, then quadrupled while the actual level of coverage goes down,” says Goldman during our recent video interview.
FYI, Goldman’s a cybersecurity pioneer: In 1991, he was the first computer networking and security professor at Purdue University. Later, he led an FBI cybercrime task force, and was the business information security officer at Salesforce before co-founding Trava.
Policy Pricing for SMBs
As Goldman explains it, pricing cyber insurance policies is incredibly complex and hinges on many factors, starting with what business the company in. For example, a 50-person company with low liability may pay $2,000 to $3,000 a year for their policy. But now, with software supply chain risks so prominent, the same size company in software development (who is a Trava client), is paying $30,000 a year for its policy.
“We deal with a lot of software companies, and they need insurance against third-party liability, particularly from their open-source components because there’s been a high proliferation of lawsuits against software companies since the SolarWinds breach,” he explains.
This also gets down to what clients of cyber insurance should be looking at in their policies. Or, as Goldman says, SMBs need to hyper focus on “what’s not in their policies.” For example, third-party liability is a must for many of those SMB’s in the software or services business, but not usually offered in standard policies.
“SMBs offering software and services are more likely to have their customers seek indemnification for business disruption when the software and services they rely on are unavailable due to a ransomware attack,” he notes. “In the case of ransomware, the policy should also carry coverage for loss of business and additional liability or costs if their data is hijacked and made available on the dark web.”
Raising the Bar
Qualifying for cyber insurance has also become more difficult for SMB’s, who now need to meet difficult demands just to be considered for insurance by underwriters.
“Prequalifying questions used to boil down to five key indicators: Do you have multi factor? Do you have EDR on all endpoints? Is your data encrypted? And other basics,” Goldman explains. “Now, once you prove those five things, then you must fill out the 200-question application. And, if you still qualify, the broker will scan your systems to validate controls.”
He advises SMBs to find a trustworthy insurance broker who will help them learn what they don’t know but need to know about their cyber insurance policies and read their policy options carefully and look for what is not there. Also be prepared to participate in a data-driven risk policies (heavy on assessment) that could ultimately streamline costs for overall insurance rates.
Most importantly, he adds, keep your network in compliance with your policy rules to facilitate faster renewal and cheaper rates.
Recommend
-
8
Perplexing Impacts of AI on The Future Insurance Claims AI is becoming a major gamechanger in the insurance sector, as more insurers use this technology to process claims. ...
-
13
Ransomware attacks are pushing up the cost of cyber insuranceColonial Pipeline CEO Joseph Blount told senators that the company had cyber insurance and expected to be reimbursed after a ransomware attack disrupted its operations in May. (Gr...
-
8
Home Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.
-
7
July 7, 2021 ...
-
9
What You Need to Know About Ransomware InsuranceRansomware can bring business operations to an instant halt. Ransomware insurance can limit the immediate and long-term financial damage. Credit: jamdesign via Adobe Stock...
-
8
Consumers question AI-driven insurance claims review
-
7
Insurance companies cutting cybersecurity coverage amid surge in ransomware attacks
-
9
A New Biogel Claims to Repair Heart Attack Damage This site may earn affiliate commissions from the links on this page.
-
10
'HardBit' ransomware asks victims to provide insurance details to identify ransom demand...
-
11
Ransomware Attack On US Dental Insurance Giant Exposes Data of 9 Million Patients
About Joyk
Aggregate valuable and interesting links.
Joyk means Joy of geeK