How Can Your Organization Qualify to Obtain Cyber Insurance?

It’s a dizzying prospect – applying for Cyber insurance. You know your organization needs it, especially with cyberattacks making headlines every week. In 2023, Canada ranked third in global data breach costs, averaging $6.96 million CAD per incident, according to IBM.

Why You May Be Hesitating from Taking this Beneficial Step

the application process seems daunting
lengthy attestations
technical terms/questions you may not understand
risk of denied claims for lack of compliance

Is there a way to make this process easier? In this blog, we'll explore how small businesses can prepare to qualify for cyber insurance by adopting basic cybersecurity practices. These steps will not only help protect your business but also make you eligible for the best rates.

Time for a Health Check

Doctor It might help to compare cyber insurance to life insurance. Approval generally depends upon meeting specific physical health requirements first. If you meet those requirements getting coverage is generally easier and less costly.

Similarly, cyber insurance requires businesses to meet essential cybersecurity standards before coverage is granted. If you put in the effort to improve your organizations cyber health first, it becomes much easier to qualify.

Essential Cybersecurity Requirements for Small Businesses Seeking Cyber Insurance

The information to follow is meant for smaller, lower-risk organizations. This would include businesses with limited sensitive data, fewer endpoints, and simpler network environments. These businesses might include local shops, small consulting firms, or small nonprofits. High-risk organizations, on the other hand, are companies with large volumes of sensitive data (like healthcare or financial institutions), more complex networks, and higher numbers of employees accessing digital resources.

The lower the risk, the fewer cybersecurity measures a business might need to qualify for cyber insurance, but every business needs a basic level of security.

Basic Cyber Security Measures for Cyber Insurance

1) Email Security

Email is the most common entry point for cyberattacks, including phishing scams. Cyber insurance providers expect businesses to have protections like spam filters, email encryption, and policies that require employees to recognize and avoid phishing attempts.

Email security is like a bouncer at an exclusive club, only allowing in those who are on the guest list and blocking anyone who doesn't belong.

Email Security Checklist:
- Turn on Multi-factor Authentication for all users of the email system
- Deploy an email protection solution to pre-screen emails
- Implement the following protocols:
  - Sender Policy Framework (SPF)
  - Domain Keys Identified Mail (DKIM)
  - Domain Based Message Authentication Reporting and Confirmation (DMARC)

2) Network Security

A secure network is the backbone of a safe organization. Firewalls, intrusion detection systems (IDS), and network segmentation should be in place to protect your data from unauthorized access.

Think of your network as your family’s home. Would you allow just anyone to enter and walk around?

Network Security Checklist:
- Robust Firewalls and Intrusion Detection/Prevention Systems (IDS/IPS)
- Tight control on open ports
- Network Segmentation
- Web Application Firewall (WAF) for high-risk websites, such as login portals or online sales sites
- Recommended: Protective DNS to block access to malicious websites

3) Backups

Regular backups of important data are essential for recovering from ransomware attacks or data loss. Cyber insurance requires businesses to have reliable backup procedures in place, with data stored off-site or in the cloud.

Backing up data is like keeping a spare key to your house in a secure offsite location—if the original is lost, you can always get back in.

Backups Checklist:
- Deploy offsite or cloud backups for all critical data and systems
- Use “immutable” backups that cannot be altered
- Encrypt your backups
- Ensure that critical systems, applications, and processes can recover within 10 days
- Recommended: Backups which continuously test restore virtually to assure integrity

4) Endpoint Security

Endpoint security protects against malware and unauthorized access, ensuring no weak link exists in your digital chain. Every device on your network should be shielded from malicious software and always monitored.

It’s like locking all the windows of your house, not just the front door.

Endpoint Security Checklist:
- Deploy and Endpoint Detection and Response (EDR) solution
- Recommended: Enforce application allowlisting/blocklisting

5) Authentication and MFA (Multi-Factor Authentication)

Passwords alone aren't enough. Implementing MFA is a key requirement for cyber insurance. It provides an extra layer of protection by requiring users to present two or more credentials before gaining access to critical systems.

Consider it the equivalent of needing both a key and a security code to enter a building—double the protection!

Authentication and MFA Checklist:
- Deploy MFA for all admin access and all remote access
- Enforce strong password policies:
  - Unique
  - Complex (upper and lowercase, numbers, symbols)
  - Longer than 14 characters

6) Software and Firmware Patching

Keeping your software up to date is crucial for security. Regular patching ensures that vulnerabilities in software are fixed, reducing the risk of cyberattacks exploiting outdated systems.

It's like fixing a leaky roof before a storm. You don’t want to wait until it's raining to patch things up.

Patching Checklist:
- Maintain a 30-day patching cadence
- Critical and zero-day patching within 7 days
- Patch both software and firmware

7) Security Awareness Training

Cyber insurance providers expect businesses to provide ongoing cybersecurity awareness training to employees. Training helps employees recognize phishing, malware, and other online threats, reducing the risk of human error.

Imagine training employees as giving them a "cyber immune system"—it helps them fight off potential threats before they become serious problems.

Security Awareness Training Checklist:
- All employees complete training at least annually
- Training for executives and key accounting personnel on fraudulent transfer schemes at least annually

8) Encryption

Encrypting sensitive data ensures that even if cybercriminals intercept it, they can't read it. This is especially important for businesses handling sensitive customer or financial information.

Think of encryption like putting sensitive documents into a high-security safe —only the person with the complex combination can access them.

Encryption Checklist:
- For retailers or restaurants: Deploy end-to-end or point-to-point encryption on all point-of-sale (POS) terminals
- Encrypt sensitive information stored on mobile devices and laptops
- Recommended: Encrypt all sensitive information at rest

9) Wires and Funds Transfer Processes

To qualify for cyber insurance, businesses must have secure procedures for financial transactions. Cybercriminals often use Business Email Compromise (BEC) to intercept funds transfers, making it critical to have multi-step verification processes in place.

Imagine requiring a second signature before every big transaction—this extra step helps catch mistakes and potential fraud.

Wires and Funds Transfers Checklist:
- Require all transfers over $25k to be authorized and verified by at least two employees prior to execution
- Verify vendor/supplier accounts before adding them to accounts payable systems
- Require out-of-band authentication (OOBA) before execution of all electronic payments
- Recommended: Prevent unauthorized employees from initiating wire transfers

The Role of Penetration Testing to Prepare for Cyber Insurance

Galactic

Penetration tests, also known as pen tests, can be an invaluable tool in assessing your organization’s cybersecurity. A pen test simulates a cyberattack on your systems, revealing vulnerabilities and areas that need improvement. By conducting regular security assessments, your business can ensure it's meeting the cybersecurity standards required for cyber insurance.

Benefits of Penetration Testing:

Identifies Weaknesses: Pen tests help pinpoint weak spots in your security before cybercriminals can exploit them.
Ensures Compliance: A test can confirm that your cybersecurity measures align with insurance requirements.
Informs Budgeting: Penetration tests give you the insight needed to allocate resources effectively, focusing on areas that will improve security and qualify for better insurance premiums.

Conclusion: Protect Your Business and Qualify for Cyber Insurance

Qualifying for cyber insurance doesn’t have to be overwhelming. By implementing basic cybersecurity measures, like those outlined in this blog, your business will be on the right track. Cyber insurance protects not only your business but also your clients and reputation.

Before applying for coverage, consider conducting a security assessment to ensure you meet the requirements and receive the best rates.

Take Action Now: Protect your business and qualify for cyber insurance by scheduling a security assessment with allCare IT today.

Tag: Cyberinsurance