Your Cyber Security Insurance Got Cancelled? Here Are the Reasons Why!

By | Published On: 15 December 2022 | 6.4 min read |

Do you know the risks of being uninsured in the digital age? With the increasing amount of sensitive information stored online, it’s more important than ever to protect yourself and your business from cyber attacks.

Cyber security is a growing concern for individuals and businesses alike. From identity theft to data breaches, the consequences of a cyber attack can be devastating. However, many people are still unaware of the hidden risks of being uninsured against cyber attacks.

In this article, we’ll explore the importance of cyber liability insurance and the risks associated with being uninsured. By understanding the potential threats and taking proactive steps to protect yourself, you can ensure that your personal and professional information is secure in the digital age. So, if you want to stay safe from cyber crime, read on to learn why you need cyber liability insurance.

What Happens if You Don’t Have Cyber Liability Insurance?

Many small to medium sized businesses believe that they’re not at risk of cyber crime because of how small their organisations are. But the truth is, these companies are easy targets for cyber criminals. In this section, we explain the potential damage you could encounter if you don’t opt for cyber insurance.

1. Financial Losses

Without cyber liability insurance, businesses are vulnerable to financial losses resulting from cyber attacks. This could include costs associated with data recovery, business interruption, legal fees, and even ransom payments to cyber criminals.

2. Reputation Damage

A cyber attack can damage a business’s reputation, causing customers to lose trust in the company. This could result in a loss of business and revenue, as well as negative publicity that could harm the company’s brand for years to come.

3. Legal Liability

If a business experiences a data breach and sensitive information such as personal data or credit card information is compromised, the business could be held legally liable for damages. Without cyber liability insurance, a business may be forced to pay out of pocket for legal fees and settlements.

Business Interruption

A cyber attack can cause significant downtime for a business, resulting in lost productivity and revenue. Without cyber liability insurance, a business may struggle to recover from the financial impact of a cyber attack, potentially leading to business closure.

Lack of Resources

Small businesses may not have the resources to recover from a cyber attack without insurance. Without cyber liability insurance, a business may be forced to rely on its own resources to recover from a cyber attack, which could be costly and time-consuming.

Limited Coverage

Traditional insurance policies may not cover the full range of cyber risks, leaving a business vulnerable to financial losses and legal liability. Cyber liability insurance provides specialised coverage for cyber risks, ensuring that a business is protected against a wide range of cyber threats.

Cyber Insurance Compliance Checklist

To qualify for coverage your business needs Multi-factor authentication (MFA) and a Virtual Private Network (VPN).

What is MFA and Why You Need it for Cyber Insurance?

Multi-Factor Authentication (MFA) is an important security feature used to protect online accounts from unauthorised access.

MFA requires users to verify their identity with more than one authentication factor such as a username and password, mobile phone number or physical token. It provides an additional layer of protection that greatly reduces the chances of malicious actors gaining access to sensitive information.

The UK government has recognised the importance of MFA for cyber insurance in the UK, introducing various measures such as making it a mandatory requirement for organisations that handle data covered by General Data Protection Regulation (GDPR) regulations.

This means any companies working with this data must have secure two-factor authentication in place and also enable customers to protect their own accounts using strong passwords and two-factor authentication methods.

The Benefits of Using an MFA

MFA is seen as an effective way to reduce the risks associated with cyber crime, which is quickly becoming one of the biggest threats faced by businesses in the UK today. Hackers are constantly developing new techniques to gain access to sensitive company information. So having an extra layer of security provided through MFA can help mitigate risks associated with data loss or breaches.

Additionally, using two-factor authentication methods can also provide useful real-time insights into user activity on a company’s network. This allows businesses to detect suspicious activity that could be indicative of a potential attack before serious damage occurs.

What is a VPN and Why You Need it for Cyber Insurance?

A VPN, or Virtual Private Network, is a technology that creates a secure connection between a user’s device and the internet. It does this by encrypting all data transmitted between the user’s device and the VPN server, making it difficult for anyone to intercept or steal the data.

Cyber insurance policies often require businesses to have certain security measures in place, and a VPN can be one of those measures.

The Benefit of Using a VPN

By using a VPN, businesses can ensure that their data is encrypted and secure, even when it is transmitted over public Wi-Fi networks or other unsecured connections. This helps to reduce the risk of data breaches and other cyber attacks that could result in costly damages and liabilities.

In addition to providing a layer of security for sensitive data, a VPN can also help businesses to comply with data protection regulations such as the GDPR in the UK. By encrypting data and keeping it secure, businesses can demonstrate that they are taking appropriate measures to protect personal data and comply with regulatory requirements.

How to Get Cyber Security Insurance

You’ll be compliant for coverage if you can answer yes to the following questions:

  • Do you use MFA for cloud based services (such as cloud based email account access) and for all remote access to your network?
  • Do you use MFA for all remote access to your network?
  • Do you use MFA for all internal administrative access to directory services, backups, infrastructure and endpoints?
  • Do you use a VPN for all remote access into your environment?
  • Does your company go through regular training in cyber security?
  • Are you effectively managing third-parties and suppliers through regular security audits
  • Do you encrypt your data everywhere?
  • Do you keep your software and firmware updated regularly?
  • Does your company regularly undergo penetration testing?

Before applying for cyber insurance, it’s important to assess your business’s cyber security risks. This involves identifying potential vulnerabilities and threats to your IT systems and data.

Depending on the cyber insurance provider, your business may be required to undergo a cyber security assessment before coverage is approved. This assessment will evaluate your business’s cyber security practices and identify any potential vulnerabilities.

Cyber risks are constantly evolving, so it’s important to regularly review and update your cyber insurance coverage to ensure it continues to meet your business’s needs. This may involve increasing coverage levels or adding new types of coverage as new cyber risks emerge.

Final Thoughts

The risks of being uninsured in the digital age are becoming increasingly apparent. Cyber liability insurance is no longer an option but a necessity for businesses of all sizes.

The potential financial and reputational damage from cyber attacks can be devastating, and having the right insurance coverage can provide peace of mind and protection for your business. Don’t wait until it’s too late – take action now and invest in cyber liability insurance to safeguard your business from the hidden risks of being uninsured.

To avoid an interruption in your cover or to make sure you don’t get rejected, speak to our team at Security Everywhere today and we can assist you in being compliant.

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