10 Ways to Reduce Your Cyber Insurance Premiums

From global companies to mom-and-pop shops, every organization using technology is at risk of a cyber incident. After all, hackers and malware can strike anyone anytime, wreaking costly havoc on unsuspecting and unprepared organizations. According to a 2022 cost of data breach report, the average damage cost of a data breach has reached a record high of USD 4.35 million. 

Provoked by the increase in data breach damage costs, many Canadian businesses are investing in cyber insurance. Cyber insurance offers businesses a combination of coverage options to help safeguard and cover the costs associated with data breaches and cyber-attacks. Costs may include lost income due to a cyber incident, expenses related to notifying customers affected by a breach, fees for recovering compromised data, and costs for repairing damaged computer systems.

The challenge is that the growing threat landscape is changing how cyber insurance operates. As a result, premiums are going up, policy limits are going down, and there is increased scrutiny of policyholders’ existing security controls. That is, organizations can look forward to spending more money on less coverage and with more stringent requirements.

Fortunately, with the right cybersecurity strategy, it’s possible to lower insurance costs and maximize the value of your cyber insurance package. Here are nine things you can do today that may reduce your annual cyber insurance premium:

1. Implement a Zero Trust Policy

The Zero Trust approach is the most effective security control and demonstrates a proactive defence mindset. This security framework entrenches the principle of “never trust, always verify.” Every activity within the organizational network undergoes thorough, ongoing security checks, with strict permission settings ensuring verified access only to sensitive data. 

Zero Trust leverages robust authentication methods, network segmentation, “least privileges” policies, and layered threat prevention techniques to prevent threat actors from moving laterally across a network at ease and speed.

2. Adopt a Cybersecurity Framework

Some insurers will reduce cyber insurance premiums if your business aligns with a recognized cybersecurity framework such as CIS, NIST, ISO 27001 and SOC 2. CIS Controls, for example, are a set of 20 best practices that can guide you through creating a layered cybersecurity strategy. Research suggests that implementing CIS Controls can reduce the risk of a successful cyberattack in a company by as much as 85 percent.

3. Enable Multi-Factor Authentication

Canadian cyber insurance companies now require insured businesses to offer multi-factor authentication (MFA). MFA is a cybersecurity measure requiring users to provide multiple factors verifying their identity before gaining access to a network, account, or online operating system. For example, MFA users must provide a password and verify access by inputting a code (often sent to another device) or confirming access with biometric data, such as a fingerprint or facial recognition. This multi-step process offers considerably more security than the traditional single password, which can be hacked to access and expose sensitive data. 

4. Develop an Incident Response Plan

Another requirement high on the cyber insurance checklist is incidence response planning. Some cyber events can lead to massive network or data breaches that can impact your organization for days or even months. Therefore, you need a well-documented, detailed course of action to help your IT team quickly stop, contain, and control the incident. This document also acts as cybersecurity evidence you can provide to a cyber insurance provider.

5. Ensure Secure Data Back-Up 

No cybersecurity plan is 100% foolproof, making secure data backups the ultimate safety net to recover from a destructive cyberattack. To ensure business continuity, maintain a positive brand reputation and avoid costly damages to your organization, you should perform regular verified, air-gapped backups for sensitive data and critical applications, whether on-prem or in the cloud.

6. Conduct Regular Penetrating Testing

The primary purpose of penetration testing is to identify exploitable issues and implement adequate security controls. However, you can also use penetration testing techniques to demonstrate the robustness of an organization’s security policies, regulatory compliance, employees’ security awareness, and ability to identify and respond to security issues and incidents such as unauthorized access.

7. Keep Software Up-to-Date 

Identifying endpoints that require updates and patches made to the OS, applications, and security software they have installed or need to have installed is critical. The most up-to-date security software will aid in blocking and removing malware from your endpoints. In addition, vulnerability patches from OS and app vendors are only effective if your endpoints are kept up to date regularly.

8. Use Strong Encryption

Encryption is critical to protecting sensitive data. Encryption converts sensitive data into ciphertext, a form that is unreadable without an encryption key. This process is called “encoding.” Encryption makes it nearly impossible for cybercriminals or other unauthorized parties to steal and misuse the data since only those with an encryption key can decipher the data and reveal the actual information. If the data is encrypted, a hacker who breaches your system won’t be able to read it. Instead, they will only see scrambled letters and numbers, making it extremely difficult to decipher the sensitive data. 

9. Conduct Security Awareness Training

Employees will always be the weakest link in every cybersecurity program. Security Awareness Training helps educate and empower your team to prevent and detect common cyber threats. It also cultivates a robust security-aware mindset and culture that prioritizes protecting sensitive information so you can feel confident that your team can quickly adapt to the ever-changing, complex world of cyber threats.

10. Use a Managed Security Service Provider

Managed security services are an excellent way for organizations that need more expertise or in-house resources to better plan, monitor and secure their digital estate. From 24/7 systems monitoring and proactive threat detection to compliance management and disaster recovery, MSSPs provide a complete security solution to defend your organization and help minimize cybersecurity-related costs. 

Wrapping Up

By taking steps to reduce your overall cybersecurity risk, you will not only access lower cyber insurance premiums but also be less likely to file a claim in the future that will affect your rates. But, more importantly, you will have taken the necessary actions to mitigate cybersecurity risk, improve your security posture and keep data breaches at bay.