Cybercrime is far from a new phenomenon. In the first recorded incident, cybercriminals infiltrated a long-distance telecommunication system to access privately held financial market data. What’s remarkable is that this attack occurred almost two centuries ago, in 1834. Two thieves exploited the French Telegraph System, marking the birth of the “man in the middle” attack, a term still used in cybersecurity today.
The growth of cybercrime is not just significant; it’s staggering. According to the Identify Theft Resource Center, in 2023 alone, there were over 3,000 known data breaches involving over 350 million total victims. It’s important to note that these are only the reported cases, and many more breaches may have gone unreported or undetected.
The average organization uses over a hundred software-as-a-service (SaaS) apps daily, and larger enterprises typically employ even more. Internet of Things (IoT) devices now number in the billions, each presenting a possible attack vector. Michael Chertoff of the Harvard Business Review states, “It is becoming practically impossible to ensure that everything is properly patched.”
The Importance of Cyber Insurance Coverage
Cyber insurance policies can ensure adherence to data breach notification protocols and, in some cases, may even cover financial loss, fines, or legal fees related to a data breach.
Cybersecurity insurance protection can:
- Enable continued operations
- Limit the amount of loss or damage inflicted by the cyberattack
- Provide many other benefits that make cybersecurity insurance coverage a prudent practice and a worthwhile investment
Changing Landscapes Mean Changing Expectations
Cyber insurance providers are now expecting demonstrably robust and thorough cybersecurity measures as a condition of providing cybersecurity coverage. Essential measures include multi-factor authentication (MFA) to allow only authorized access to shared data.
Other measures — such as intrusion or anomaly detection, ongoing vulnerability scanning, software bill of materials (SBOM) systems to manage third-party components, routine vulnerability scanning, and threat identification — are becoming more of a consideration for companies providing cyber insurance.
These risk management practices must be backed by detailed, thorough, and rapidly deployable incident response plans. Regularly reviewing and updating plans to identify, assess, and respond to cyber threats is no longer a “nice to have” feature — it’s a condition of doing business.
To be considered a good candidate for cyber insurance coverage, an organization is expected to become increasingly adept and responsive to potential threats. A detailed response strategy must also clearly detail the immediate steps to implement during a data breach.
Proof of Regulatory Compliance
Yet another vital requirement for cybersecurity insurance coverage is proof of compliance with growing and increasingly demanding data privacy regulations. Securing cyber insurance coverage requires documented evidence that your organization adheres to these regulations.
As businesses operate on an increasingly interconnected global scale, compliance with domestic regulations, such as the California Consumer Privacy Act (CCPA), and international rules, like the European Union’s General Data Protection Regulation (GDPR), is necessary.
More regulations are sure to follow. Customer data must be handled in a manner that guarantees its safety and integrity. This compliance issue is an increasingly common condition for cybersecurity coverage.
Emerging Cybersecurity Requirements
Instead of relying solely on reactive response plans, cyber insurance policy providers emphasize more robust and widely deployed preventative measures. Insurers not only favor businesses that prioritize proactive threat mitigation but, in some cases, may limit or refuse cyber insurance coverage to businesses that fail to demonstrate an adequate defensive posture.
Extended detection and response (XDR) solutions will also become a necessary weapon in cybersecurity prevention and response and a likely requirement of cyber insurance providers.
Only through the integration of multiple products — such as artificial intelligence (AI) and machine learning (ML) systems — can the vast amounts of raw telemetry data generated across numerous elements be collected, analyzed, and responded to in an immediate, real-time manner that can detect, contain, and defeat modern intrusion attempts. This reduces the risk of providing cyber insurance, making it easier to obtain broader and more robust coverage at more advantageous premiums.
Ongoing Cybersecurity Awareness Training
Human error accounts for over 80% of successful intrusion attempts. The mounting significance of employee training in cybersecurity best practices cannot be overstated. More than ever, each team member plays a pivotal role in maintaining secure virtual environments.
Regular training is crucial in reducing the risk of human error-related breaches. Such training programs cultivate a cybersecurity culture within the business, equipping employees with the knowledge and skills to identify and repel potential threats.
The evolving nature of the cyber threat landscape calls for continued, scheduled cybersecurity awareness training. The more educated and prepared your team is, the less room there is for errors that lead to security breaches.
Making Sure Your Company Meets 2024 Cybersecurity Insurance Requirements
Cyber insurance is no longer an optional novelty. Your organization must be in a position to secure adequate coverage against any possibility, and with the growing number of successful cyberattacks, the need for cybersecurity insurance is clear.
Providers’ cyber insurance requirements in 2024 include:
- A strong cybersecurity posture
- Well-documented risk management
- Incident response plans
- Thorough compliance with data privacy regulations
The rapidly evolving threat landscape highlights the importance of proactive measures, leveraging AI and other advanced security technologies, and providing employees with comprehensive and ongoing cybersecurity awareness training.
Being able to prove your organization has taken the necessary steps, such as adhering to Service Organization Control Type 2 (SOC 2) Certification, will make it easier to meet cyber insurance requirements and may also aid in the scope and cost of such insurance.
Pixel Machinery is here to assist businesses in navigating these requirements. We can offer resources and support to help strengthen your cybersecurity measures and meet potential cyber insurers’ expectations.
In a world of evolving and rapidly multiplying cyber threats, the right coverage and protection can be the difference between business resilience and financial catastrophe. Don’t hesitate to seek professional advice on how your organization can meet the cybersecurity insurance coverage requirements that fit your unique needs.
