Like traditional insurance policies, cyber insurance also includes a deductible.

Cyber liability insurance protects businesses from the high costs of a data breach or malicious software attack. It covers expenses such as customer notification, credit monitoring, legal fees, and fines.

Companies can reduce their overall risk profile and demonstrate to insurance companies that they are taking proactive steps to protect themselves against cyber threats. Some of the cybersecurity defense measures that may qualify a company for a discount on their cyber insurance premiums include:

☑︎ Turning on multi-factor authentication
☑︎ Enforcing a strong password policy
☑︎ Cyber training for employees
☑︎ Effective third-party management
☑︎ Use of a Managed Detection and Response (MDR) provider
☑︎ Regularly installing patch updates
☑︎ Encrypting data and performing regular back-ups
☑︎ Storing backups separate from the network
☑︎ Developing of a clear incident response plan

While cyber insurance can help businesses mitigate the financial losses resulting from a cyber attack, it cannot prevent the attack from occurring in the first place. It is important for businesses to have both cybersecurity defense and cyber insurance in place to protect themselves from cyber threats.

A robust cybersecurity defense can help prevent cyber attacks from occurring, while cyber insurance can provide financial protection in case a cyber incident does occur.

Companies that invest in robust cybersecurity defense measures can benefit from significant discounts on their cyber insurance premiums. Insurance companies consider a variety of factors when determining the premium for a cyber insurance policy, and one of the most important factors is the level of risk associated with the insured entity. Contracting with a Managed Detection and Response (MDR) provider significantly reduces your risk of cyber-attacks and data breaches, thereby reducing your overall risk profile and unlocking much lower insurance premiums.

To issue a cyber insurance policy, insurance providers typically analyze a company's cybersecurity posture. The business must provide information about its operations and security practices, such as the type and volume of sensitive data it handles, its IT systems and software, and any third-party vendors or partners it works with. If a business has not invested in adequate cybersecurity solutions, it may not qualify for insurance or may face limited coverage at a higher cost.