Cyber Insurance Blog

Cyber Insurance Requirements: Are Your Business Clients Meeting Them?

Cyber Insurance Requirements: Are Your Business Clients Meeting Them?

As data breaches, ransomware attacks, and other cyber security threats continue to make headlines, businesses increasingly recognize the importance of Cyber Insurance in managing risks. As a result, many organizations have begun to develop cyber security controls to meet carrier Cyber Insurance requirements and secure strong coverage. However, the adoption of these controls remains sluggish, failing to keep pace with today’s threat landscape.

Recently, Zane Goldthorp, the director of broker management at ProWriters, engaged in a brief discussion with Bill Mertz, a senior broker for the company, to explore the various controls carriers consider when evaluating a cyber risk quote. Drawing on his extensive experience in assessing cyber risks, Bill highlighted essential security measures like multifactor authentication (MFA), endpoint detection and response (EDR), secure email gateways (SEG), and segmented backup systems, which are commonly required by insurance carriers.

Meeting Modern Cyber Insurance Coverage Requirements

As the demand for Cyber Insurance grows in the digital age, carriers have raised the bar regarding Cyber Insurance requirements. To secure comprehensive insurance coverage, businesses must adhere to several cyber security controls that align with industry standards.

1. Multifactor Authentication (MFA)

IT team identifies weak areas in cyber security network. During the discussion, Bill mentioned that the vast majority of insurers have implemented MFA. This trend is largely attributed to facing previous challenges in obtaining coverage or restrictions when they did get covered in prior years. Consequently, there has been noticeable improvement in this area.

MFA enhances security by requiring users to provide multiple verification factors to access applications, accounts, or websites. These verification details fall into three categories: knowledge, possession, and inherence.

The knowledge factor requires users to provide something they know, such as a personal identification number (PIN), security question, or password. Possession factors include something the user has, such as a device or card. Lastly, the inherence factor refers to something specific and unique to the user, such as biometric information. Combining these factors reduces the risk of unauthorized access and strengthens overall security.

2. Endpoint Detection and Response (EDR)

EDR enables real-time monitoring and threat detection on network-connected servers and devices (endpoints). This powerful security control leverages advanced analytics and threat intelligence to detect malicious activities and indicators of compromise to flag potential and actual cyber threats.

Organizations that implement EDR into their cyber security strategies gain better visibility into the health of their network and facilitate rapid response to incidents before they cause major damage. Carriers recognize the importance of EDR in detecting and mitigating cyber risks, making it a key Cyber Insurance coverage requirement.

3. Secure Email Gateway (SEG)

Email remains a primary attack vector for cyber criminals, with threat actors using the platform to conduct phishing, social engineering, and malware attacks. This challenge makes SEG solutions a critical Cyber Insurance requirement. These security tools use advanced machine learning algorithms to analyze email content, attachments, sender reputation, and other factors and identify potential security risks. SEG can detect and block spam, malicious emails, and phishing attempts to protect businesses from email-borne threats.

4. Segmented Backup Systems

Businesses can protect their data from cyber attacks and operational disruptions with segmented backup systems. These systems store data in locations separated from the organization’s main network. Examples include external hard drives, offline servers, and cloud storage solutions. These solutions help mitigate the impact of cyber incidents and minimize downtime, meeting the requirements of Cyber Liability Insurance coverage.

Navigating Imperfection and Uncertainty in Meeting Cyber Insurance Requirements

African American businessman goes over Cyber Insurance requirements with staff.While all of the cyber security controls we’ve explored play a critical role in mitigating modern cyber risks, it’s important to recognize that most Cyber Insurance applications fall short of meeting these requirements.

Zane pointed out the frequent use of the term “imperfect insurer” among Cyber Insurance professionals and asked Bill for his insight on the topic.

“I think all insureds are imperfect to an extent,” Bill responded. “You know, you could have MFA and great backups and even an EDR tool, but what we see a lot of firms lacking is proper security training for their employees and lack of an incident response plan, which has been tested. You know, they may not have tested the integrity of their backups and [have] no real baseline procedures around timely patching of critical known vulnerabilities.”

While cost-effective and readily available, ProWriters’ analysis reveals that 67% of applicants lack basic MFA controls. Only 18% of applicants can confirm the complete implementation of the four cyber security controls, highlighting the difficulties organizations face in meeting modern Cyber Liability Insurance requirements.

Brokers and carriers must adapt their approach to account for imperfections and uncertainties to thrive in the modern Cyber Insurance landscape. Below are two key considerations:

Go Beyond Automation

While automation and data-driven processes are useful, human discretion is still essential to identify complex cyber risks. Carriers should work with underwriting professionals who can analyze unique risk profiles and make informed decisions that go beyond the limitations of automated processes. Moreover, automated platforms should be designed to accommodate the nuances of varied risk profiles and enable personalized assessments.

Foster Collaboration

Brokers, carriers, and organizations should foster communication and collaboration to understand specific risk challenges. A risk-based and collaborative approach can aid in creating comprehensive coverages that align with both the evolving needs of businesses and the changing threat landscape.

ProWriters Gives Brokers Powerful Technology With Personal Support

 Insurance agent advises business clients on requirements for obtaining Cyber Insurance policy.

ProWriters understands the challenges brokers face in navigating the industry and helping their clients meet evolving Cyber Insurance requirements. We offer powerful technology and personal support to ensure our partner brokers have the tools and assistance they need to thrive in the industry.

As a partner broker, you’ll have access to our Cyber IQ Comparative Rate Platform, an innovative tool that allows you to generate multiple quotes from leading carriers in minutes. Our comprehensive vendor list showcases our trusted partners in the industry, providing specialized solutions to amplify your offerings.

Stay ahead of the curve and take your services to the next level with ProWriters. Schedule a call today to learn how we can help!

Subscribe to Our Monthly Newsletter!

    Retail vs. Wholesale Brokerage

    Experts Weigh In

    Get the eBook