In these times when pretty much every business, including startups and charities, has some kind of online presence, cyber insurance coverage is critical.
If cybercriminals hack your network and steal customer’s data, you could find yourself on the wrong end of a lawsuit that could potentially cripple your company financially. But insurance can be expensive. So, how can you significantly reduce your cyber insurance premiums?
Why have cyber insurance premiums increased?
Cyber attacks are becoming increasingly more sophisticated and commonplace, and so are the costs of the damage inflicted by these criminal activities. According to recent reports, the average cost of UK data breaches in 2023 hit £3.2 million.
In response to that increasing threat, many UK businesses are taking out cyber insurance to protect themselves from these attacks. However, insurers have responded by inflating their cyber insurance premiums.
The good news for companies looking for affordable cyber insurance is that it is possible to lower insurance costs by employing a few intelligent strategies to maximise the value of your insurance package.
How are cyber insurance premiums calculated?
Insurance underwriters use complex risk assessment and sophisticated data analysis models based on various quantitative and qualitative risk factors to determine their cyber insurance premiums.
However, the premium you pay will be based on the likelihood of your company suffering losses as the result of a cyber-attack or data breach and the size of those damages.
You can read more about how cyber insurance premiums are calculated by reading our dedicated article.
Can cyber insurance premiums be lowered?
The good news is that you can lower the cyber insurance premiums your business will have to pay by implementing a few simple initiatives.
Best ways to help reduce cyber insurance premiums
To reduce your cyber insurance premiums, you need to demonstrate to the insurer that your business has implemented effective cybersecurity practices and measures, thereby reducing the risk of a cyber incident.
Risk assessment
Carry out regular cybersecurity risk assessments to identify potential threats and areas of your network that might be vulnerable to cybercriminals. Then, put in place risk mitigation measures based on your assessment findings.
Robust cybersecurity policies
Enforce comprehensive cybersecurity policies to cover access controls, data protection, employee training and incident response, and be sure to update policies regularly to keep in line with evolving cyber threats.
Employee training
Train all your employees on cybersecurity best practices, ensuring your staff members know how to avoid phishing scams, recognise social engineering tactics and use strong passwords.
Incident response plan
Develop and put in place an incident response plan to ensure your business can react swiftly and effectively to cyber incidents. Carry out regular drills to test the effectiveness of your plan.
Invest in cybersecurity technology
Use advanced anti-cybercrime technologies, including intrusion detection systems, firewalls and antivirus applications to protect your business against cyber threats.
Hold regular security audits
Carry out security audits regularly to assess the effectiveness of your cybersecurity measures and identify areas for improvement.
Encrypt data
Encrypt all sensitive company and customer data to protect it from unauthorised access.
Third-party security assessments
Work closely with third-party cybersecurity experts to carry out assessments of your cybersecurity measures. That can provide an objective, independent evaluation for insurers to consider when calculating risk and setting premiums.
Customise cyber insurance to meet your needs
There’s no point paying for insurance coverage you don’t need; a tailored insurance policy can save you money and provide better coverage. Talk to the experts at Stanmore Insurance for professional advice on the best insurance coverage for your business.
Monitor and update your network
Continuously monitor your network and computer systems to spot and react to any potential threats or anomalies, and update your software to patch any known vulnerabilities.
Document security measures
It’s a good idea to keep detailed records of your cybersecurity measures, as that information can be useful when negotiating with insurers.
You’ll find that by demonstrating a proactive approach to cybersecurity and implementing robust measures to prevent and respond to cybercrime, you can often reduce your cyber insurance premiums.
Protect your business from Cyber crime
Almost every business has an online presence these days, and that has seen a dramatic increase in cybercrime and data breaches. For that reason, organisations of all sizes and in every sector are taking out cyber insurance coverage to protect them.
You can potentially reduce your cyber insurance premiums by taking the steps outlined in this article.
For more information on what you can do to keep costs down and get the most appropriate cyber insurance coverage for your business, talk to us today.