Jul 31, 2023
As we recently discussed in our cyberwarfare blog, cyberwarfare has increased over the last year because of the conflict between Ukraine and Russia that began in February of 2022. Many of these attacks are state-sponsored attacks, meaning that they come directly from a country’s government. In more recent cases, most of the attacks have been coming from Russia.
To better understand the cyber insurance coverage situation, it’s important to go over some numbers. After Russia’s invasion of Ukraine, the number of cyberattacks across the globe in 2022 increased by 38% compared to the number of attacks in 2021. The United States is a target because cyberwarfare committed on countries that are part of NATO has increased by 300%. On top of the general cyberattack numbers, ransomware has increased by 87% in 2022 when compared to 2021.
Why do all of those numbers matter? The Blade team is here to tell you!
State-Sponsored Attacks are Driving Up Insurance Costs
Because of how common state-sponsored attacks are becoming, insurers all over the globe are trying to figure out how to avoid covering state-sponsored cyberattacks and hacks. These huge attacks and data breaches are driving the cost of cybersecurity insurance up.
According to Bloomberg Law, Chubb Ltd. is considering higher prices and insurance deductibles for these cyberattacks. Beazley Plc is creating a new war insurance product that is not included in its standard cyber policy. It will cover hacks between nation-states. In addition to those specific companies, other insurers are adjusting their policies so that they don’t cover cyber terrorism initiated by nations.
This increase in cybersecurity insurance costs is leaving businesses of all sizes left to figure things out for themselves. The average price for cyberattack insurance increased by 79% in the second quarter of 2022. This was after it had already increased in previous quarters.
What makes this even scarier for businesses is that this was only directly after the Russia and Ukraine conflict. The numbers are only getting worse.
Should your business pay higher prices? Or should you not get cyber insurance? We want you to get all of the coverage you need at a fair price.
How to Find Good Cyber Insurance
Take a Look at Your Risks
Begin by conducting a comprehensive risk assessment of your company’s digital assets. This includes sensitive data, IT systems, and networks. This evaluation will help you identify the potential cyber risks your business faces and determine the coverage you need.
Understand Your Needs
Based on your risk assessment, figure out the specific coverage your company needs. Common elements of a cyber insurance policy include first-party coverage (data breach response costs, business interruption, and cyber extortion) and third-party coverage (legal defense, settlement costs, and regulatory fines). Ensure the policy aligns with your business needs.
Examine the Policy Limits and Deductibles
When looking at each insurance plan to make sure it protects your business, carefully review the policy's limits and deductibles. Make sure the limits are high enough to cover losses, including legal expenses. Additionally, consider the deductibles that apply and see if they’re affordable.
Look Carefully at Exclusions
This is where we are seeing huge changes because of state-sponsored cyberwarfare.
Pay attention to the policy's exclusions, as they define situations or circumstances where coverage may not apply. You need to fully understand the scope of exclusions and see how they might affect your business. If an exempt cyberattack occurs, your business might be out a lot of money.
Big financial losses and data losses can completely break small businesses. If there is an insurance plan that doesn’t include state-sponsored cyberattack coverage, we recommend you look elsewhere.
Examine Policy Terms and Conditions
Read and understand the policy's terms and conditions thoroughly. Pay close attention to provisions related to notification requirements, claims handling, sub-limits, and retroactive dates. Make sure these provisions align with your business practices and industry regulations.
Compare Insurance Plans
Get quotes from multiple insurance providers to compare coverage, pricing, and policy terms. This will give you a better understanding of the options available and help you negotiate better terms. Never go with the first option!
What Do Good Cyber Insurance Policies Cover?
Good cyber insurance covers expenses resulting from a cyberattack on your business’ infrastructure or data. This can include:
- Coverage to repair or rebuild infrastructure that’s been damaged following an attack.
- Coverage to recover stolen, damaged, or altered data.
- Coverage to get up and running again after a cyber ransomware attack, such as an infection with cryptolocker software.
- Liability coverage for legal expenses and crisis management following a customer data breach.
- Liability coverage for investigations, and regulatory expenses/fines following a data breach.
Blade Can Help You Make a Decision
Our team can provide expert consulting and more in-depth cybersecurity insurance support to help protect your company from increased insurance costs due to state-sponsored cyberwarfare. With how common these cyberattacks have become, it’s important that you’re prepared with the perfect insurance policy.
While we are not a direct cybersecurity insurance provider, we will work with you to develop and implement a cybersecurity strategy. This reduces the chances you'll become a target and lowers the costs of premiums you receive from insurance providers.
Learn More About Cyber Insurance from Blade Technologies, Inc.
If you want more information about cyber insurance coverage costs and how the increased costs can affect you, contact the Blade team today.