Cover Your Bases: Lack of Controls May Limit Cyber Insurance Access

Feeling lucky?  Like to gamble?

It’s one thing to play a small-potatoes hunch on your smartphone as you watch your favorite professional team on television.  It’s quite another to risk your entire business enterprise on something that never needed to be at risk at all – your cybersecurity protocols.

As the scope and expertise of malicious online operators grows, so is the insistence of insurers that their business clients have adequate cybersecurity controls in place.  A growing consequence for those who have not installed and maintained such controls is that they cannot acquire the needed coverage.

An industry leader recently conducted a study that concluded underwriters have adopted a “laser focus” on data security controls when looking at renewal risks, with “even greater underwriting scrutiny” of those controls as time goes on.  The desired preventative controls cited include:

  • Multifactor authentication
  • Remote desktop protocol
  • Segregation of networks
  • Encryption

Those without these protocols in place will be increasingly met either with a decline of coverage or rates increased as much as 200 percent or even higher, according to the report.  The threat of hackers successfully breaching cybersecurity protections has become such an issue for businesses, that even best-in-class risk managers – who have all preferred protections in place – may still see their premiums increase, but at a much lower rate.

So play those little parlays on your phone all you like.  But don’t leave your entire business enterprise open to such a huge bet.  Survey your cybersecurity protections and make sure they’re in place and working.

For more information, contact the professionals at The Reschini Group today.

Copyright 2022 The Reschini Group

The Reschini Group provides these updates for information only, and does not provide legal advice.  To make decisions regarding insurance matters, please consult directly with a licensed insurance professional or firm.