Why Cyber Insurance for Public Entities Is Essential

Cyber crime is one of the world’s fastest-growing criminal threats. Even billion-dollar companies fall victim to data breaches, ransomware attacks, and other hacking events. The losses amount to millions of dollars and countless hours of disruption.

But cyber criminals don’t target companies in the private sector only.

Many municipalities and public entities have suffered a cyber security breach that freezes their systems and disrupts their operations and services. No entity, private or public, is immune to cyber risk.

Read on to find out why Cyber Insurance for public entities is essential and what kind of coverage they need to protect themselves from cyber threats today.

Why Public Entities Make Attractive Cyber Crime Targets

Cyber criminal wearing hoodie sits at desk, back to camera, in front of laptop computer and three large display monitors.When hackers search for potential targets, they seek businesses storing sensitive data or relying heavily on online systems.

Municipalities and public entities fit both criteria.

They may store personal information, tax records, or other sensitive information people don’t want sold to the highest bidder on the illegal market.

In addition, many municipalities use online systems to collect revenue, deliver services, and administer the city or town.

In recent years, cyber incidents directed against local governments have increased.

For example, a study from the Center for Internet Security found that, among state and local government organizations surveyed, malware attacks increased 148% in the first eight months of 2023 compared to the same time period the previous year. Ransomware attacks were 51% more prominent.

Cyber events that have affected municipalities show how serious these events’ consequences can be. Here are only a few examples:

  • In August 2022, ransomware shut down the computer systems of Fremont County, Colorado. The incident closed all of the county’s buildings, including its administration and public health facilities.
  • In January 2024, a cyber attack disabled the computer-aided emergency dispatch system in Bucks County, Pennsylvania.
  • In May 2024, the municipal government in Macon-Bibb County, Georgia, suffered a cyber attack. It affected online court system payments, park reservations, vehicle tag and title registrations, and property tax and garbage bill payments.

Clearly, cyber attacks against public entities can do much damage and cause much chaos.

Taxes go uncollected. Court cases go unscheduled. Law enforcement and emergency services go undispatched. The targeted government isn’t able to meet all its responsibilities or provide services on which so many people depend.

The Most Common Cyber Threats Facing Public Entities

To what specific attacks are public entities most susceptible?

Ransomware Attacks

Cyber criminals use ransomware to access public entities’ sensitive information or freeze their systems. They encrypt victims’ files, locking them away behind a digital barrier only the ransomware operators can unlock. They demand payment in return for restoring access.

Often, they reveal their hold on the entity in pressing or time-sensitive situations. For example, if the targeted government is in the middle of collecting taxes, it may pay a higher ransom than at other times.

Hacktivist Attacks

In hacktivist attacks, cyber criminals use hacking as social or political activism. They may try to take online systems down for extended periods, expose private data, or cause other inconveniences to the entity.

Although most private companies don’t have to worry about hacktivist attacks, public entities do. For instance, whenever a local government passes a new, controversial law, it can make enemies. If those enemies are skilled hackers, they may wreak havoc on the government.

State-Sponsored Attacks

In a state-sponsored attack, a hostile government uses hacking instead of physical conflict to cripple another country’s infrastructure, collect secret intelligence, or steal money.

Because public entities often play critical roles in a nation, they make good targets for an enemy country. Nations today depend on the internet and technology, and warring countries can attack and cripple each other solely through hacking. Cyber attacks can quickly escalate into threats to national security.

For example, federal investigators believe a Russian espionage organization was responsible for the SolarWinds hack in 2020, although the Russian government denied involvement. The attack triggered an IT supply chain incident affecting more than 30,000 private and public organizations, including the U.S. government.

The Best Cyber Insurance for Public Entities

Red, white, and blue lines of digital code form image of United States flag, suggesting cyber attacks on national security.
To protect themselves from cyber crime, public entities should always implement a thorough cyber security program. It should encompass:

  • Conducting risk assessments to identify vulnerabilities.
  • Training employees to recognize phishing attempts, social engineering tactics, and other forms of cyber risk.
  • Implementing best cyber security measures, such as using multifactor authentication to access sensitive systems and endpoint detection services to monitor for threats in real time.
  • Updating software and system updates on a regular basis.
  • Developing an incident response plan that outlines clear steps to take in case of a cyber breach.

Another vital line of defense is proper Cyber Insurance for public entities. These policies cover the costs and financial losses associated with cyber incidents that traditional insurance policies don’t.

With the right level of coverage, public entities can mitigate the risk of technological and financial damage they run.

At a minimum, Cyber Insurance for public entities should include coverage for:

  • Breach notifications
  • Regulatory fines
  • Fees for legal counsel
  • Forensic investigations into incidents’ source and scope
  • Temporary server backups
  • Data recovery and system restoration costs
  • Ransom negotiation
  • Ransom payment

Cyber coverage limits and Cyber Insurance premiums will vary depending on the public entity’s size, scope, responsibility, and vitalness.

ProWriters Helps You Secure Public Entity Cyber Insurance Faster and Easier

When you’re a registered ProWriters broker, you have access to our Digital IQ Comparative Rate Platform.

Registered ProWriters brokers at desks in cubicles, using laptop computers to research Cyber Insurance for public entities.  
It’s our powerful system for researching, quoting, and binding Cyber Liability Insurance policies—as well as other vital lines of liability coverage—in less time and with less effort.

With Digital IQ, you can:

  • Generate multiple quotes for simple, side-by-side comparison in a matter of minutes.
  • Place even large and complex risks, since you’re finding policy options from the leading insurance companies.
  • Compete more effectively with direct markets, because you’re backed up by our experienced team of experts.
  • Earn higher commissions than those offered by conventional wholesalers.

Help improve public sector cyber security by finding the right Cyber Insurance coverage for the public entities you serve as broker or agent.

Register as a ProWriters broker now.