While cyber insurance isn’t always required for every organization, it’s something most should be considering (and may actually be a contractual obligation with clients!). Many entities already have a cybersecurity policy for employee conduct—particularly in high-risk industries like healthcare and finance—but according to Network Assured, only half of businesses have cyber insurance at all. Why is this the case?
It comes down to one main challenge that cyber insurance providers face: risk assessment. Most insurance companies will use some form of a cyber insurance coverage checklist to assess your risk levels, for example. And while this is helpful in some regards, a static, unchanging checklist does not give an accurate representation of risk. The digital landscape is constantly changing, after all, with hackers and other bad actors developing new threats and methods of breaching cyber defenses. What’s worse, by the time an insurance company runs through their coverage checklist, it’s possible a new threat could emerge that’s not written on their preset list at all, creating a potentially major vulnerability for your business.
This disconnect between a provider’s risk assessment process and the actual risks facing your business creates the potential for several different pitfalls. For example…
Coverage plans can end up outdated before they’re ever implemented, leaving your company and its assets vulnerable to a devastating cyber attack. What’s worse, undefined coverage may fail to cover certain attacks at all. And in many cases, if your business systems are breached, it could be too much to recover from.
Insurance companies may end up charging you based on a risk level that is higher than what your company actually represents, simply because their static checklist has at some point classified your business as “high-risk.” This ends up making cybersecurity insurance for a business overly expensive, especially for a small business. This, of course, is ironic, considering small businesses are in the most danger of being attacked by hackers, according to Forbes.
Ultimately, businesses of all sizes and across a wide range of industries work with insurance providers because they want a safety net in the worst case scenario. But truthfully, in cyber insurance, it’s hard to know where that safety net needs to be placed. And there’s little room for error, either; a potential misfire can be costly, if not catastrophic.
What is cyber insurance good for if it can’t protect companies, costs too much for most to avoid, and cannot properly assess risk?
The answer is simple: it doesn’t have to be that way. Cyber insurance can, and should, be a service that provides proper risk assessment and client protection at a price that is affordable even for small businesses. It all starts with giving insurance providers—as well as the companies they work with—the tools they need to accurately and effectively assess risk. That’s why we at Trava provide a continuous risk management program, complete with services and assistance to guide providers and clients as they work to establish coverage.
Who Needs Cyber Insurance?
Every organization’s risk level is different, so the question of “needing” cyber insurance is best addressed on a case-by-case assessment. With that being said, though, it’s important to note the types of companies being attacked with the greatest frequency or impact. These include small businesses, as well as companies operating in the healthcare and banking industries. Let’s take a closer look at each of these entities and why cyber insurance coverage is so vital.
Small Businesses
It’s no secret that small businesses already have it tougher in some respects, but cybersecurity is a place where they suffer more than most. In addition to Forbes finding that they are three times more likely to be targeted by a cyber attack, a report by strongDM revealed a slew of disturbing data points on small business cybersecurity. Here are just a few:
Almost half of all cybersecurity breaches happen to small businesses (less than 1,000 staff).
Over 80% of all ransomware attacks happen to small businesses.
Small businesses receive the highest amount of targeted malicious email.
Over half of small businesses that fall victim to ransomware end up paying the money.
Healthcare
The medical industry is responsible for what is possibly the most sensitive information individuals have—and apparently, cyber criminals know this. In the last three years, 90% of healthcare organizations have reported at least one breach, and the Association of American Medical Colleges found that cyber attacks surged in the COVID-19 pandemic, becoming more aggressive. These attacks decimated hospitals’ digital infrastructure and interfered with medical treatments, quite literally costing lives. And according to the data, this trend is not slowing down anytime soon.
Banking
The financial sector has always been seen as a high-risk industry, but as banking becomes more digitized, those risks increase greatly. With mobile banking now a mainstay for almost 45% of Americans, there are more potential points of failure that banks cannot account for. Failure in the banking industry hurts the financial institution, but it hurts their individual clients even more—particularly if their money and identity are compromised.
So, while cyber insurance is not always “mandatory,” it’s clear that cyber insurance is very much needed in these industries and so many others. So how do companies—and their potential cyber insurance providers—better define their cyber insurance requirements to include smarter, more comprehensive risk assessments? It starts with solutions like Trava.
Is Cyber Insurance Worth It? With Trava, Yes!
In the future, the best cyber insurance companies will be known for providing accurate risk assessment and coverage that not only works, but is tailored to the client’s true risk level. And in order to have that kind of coverage, insurance providers need a partner like Trava at their side. For providers, Trava’s risk management program gives continuous, responsive risk assessment to inform coverage decisions. Insurance companies can rest easy knowing that they’ve properly calculated the risk for their clients, and those clients can feel confident in their coverage—all at a fraction of the price they might otherwise pay.
Just as importantly, though, Trava empowers companies like yours with the risk assessment tools and actionable insights you need to better understand the modern cybersecurity landscape, your own company’s assets and vulnerabilities, and how your cybersecurity posture will be assessed by carriers. All of this helps you to make more informed decisions and to get the right coverage at the right time.
The best cyber insurance companies to work with will offer agile, responsive risk management, as well as continuous service and assistance to walk you through the complex nature of cyber insurance. How does Trava help? Book a demo today and see for yourself the power of true risk management!
