Currently where online crime is rampant, it has become critical to have a reliable cybersecurity insurance plan. This layer of protection is especially true for small businesses that mainly operate in an online environment. Insurance will provide considerable financial protection in the event of an online attack. While most business owners understand its importance, many still opt not to purchase cybersecurity insurance. Why? It’s because the insurance premiums can get high. Many believe the risk isn’t enough to justify spending thousands of dollars on coverage. If you are lucky, then you probably won’t become a victim. But it’s not smart to wish for luck to keep you safe, especially when you realize how much damage a single attack can incur.
Is Cybersecurity Insurance Expensive?
The steep cost of cybersecurity insurance is understandable because of the very high perceived risk. Online crime has become not just more prevalent but also much more complex. The damage is extensive, and insurance companies have no choice but to raise their premiums to keep offering complete coverage.
Another reason for the high premiums is the massive payouts that companies pay out because of data breaches. Businesses that collect sensitive data, like healthcare and banking, have even higher premiums. These companies are prime targets for hackers and therefore have a higher risk factor.
How to Qualify for Lower Cybersecurity Insurance Premiums
Now we get to how to lower your insurance premiums. The fee reduction is much simpler on other insurance, like healthcare or vehicles. Usually, you need to tick a box on the form or sign a waiver. With cybersecurity insurance, it’s not so straightforward. But not to worry. There are ways to reduce the insurance premiums you need to pay.
Do an Annual Penetration Test
This test will check how robust your security measures are to protect your business from a cyberattack. You can do this test yourself, but we recommend you partner with a managed services provider for this task. With this test, you can identify your system’s weak points to improve them. Insurance companies will see that you are not at risk and list you for a lower premium. If you do see risks in the assessment though, its important to make improvements! Risks highlighted in an assessment are potential areas where you could be breached.
Choose Secure Passwords
This task might seem basic, but insurance companies check the password control policy when assessing applicants. A more secure policy will entitle you to lower premiums, as will a two-factor authorization, or 2FA, login policy. You should also train your employees to choose their passwords wisely. An employee readiness check will reveal how much your staff knows about the importance of passwords and other security issues.
Do Data Encryption
Again, this is something that most companies already do these days. Encrypting confidential and sensitive data is vital for protection. Encryption can apply to physical and virtual data. You can improve your data encryption methods considerably with the help of a managed services provider.
Use Your Current Insurance Provider
If you already have an insurance provider for general business liability insurance or property insurance, you can purchase your cybersecurity insurance from them if they offer it. There’s a good chance that you can get a discount from a bundle deal. Make sure to look over any policy they have on Cybersecurity insurance to make sure that it covers what you need it to, though!
Get Peace of Mind with Reliable and Affordable Insurance Premiums
Getting your business insured will surely give you peace of mind in a world riddled with online crime. But you don’t always have to pay top dollar for the best coverage. Following the strategies above and following recommended cybersecurity practices, you can get great insurance with affordable premiums. Our cybersecurity experts can help you with a risk assessment and finding the best insurance coverage that matches your needs.