Cyber Insurance Tips: How Adjusters View Your Risk

In today's digital age, the threats of cyber-attacks and data breaches are more prevalent than ever before. As a result, businesses across industries are increasingly turning to cyber insurance to help mitigate their risks. However, before securing a cyber insurance policy, it's important to understand how adjusters assess the risk involved. By gaining insight into their evaluation process, you can better prepare your business and improve your chances of obtaining comprehensive coverage.

“Adjusters are getting savvier on how they evaluate your risk profile,” says Casey Jennings, MightyID’s Strategic Alliance Executive. “They’re looking closely at your BCDR [Business Continuity and Disaster Recovery] Plans, and how ready you are to recover in the likely event of an incident.”

In this article, we will explore key factors considered by adjusters in assessing cyber insurance risk, the role of cloud security, the importance of cloud backups, and what the future holds for cyber insurance.

Key Factors Considered in Assessing Cyber Insurance Risk

When assessing cyber insurance risk, adjusters take multiple factors into account.

Basic Business Information

Like any insurance product, they will consider basic factors such as the size and nature of your business, industry and associated risk, assets, etc. They will also consider factors outside of your control, but which impact the potential risk landscape of your business, such as trends in cyber-incidents in similar types of companies, or laws and regulations unique to your geography.

Third-Party Security Strength

As an additionally important aspect of your company’s security, adjusters may also evaluate the third-party relationships your business maintains. This includes vendors, suppliers, and any other external entities with access to your systems or data. Assessing the security practices and controls of these third parties is crucial in understanding the potential risks they may introduce to your organization.

Threat Landscape

Lastly, adjusters keep a finger on the pulse of the ever-evolving cyber threat landscape. They stay up-to-date with the latest trends, attack vectors, and emerging technologies used by cybercriminals. This knowledge allows them to assess the potential risks your business may face in the future and recommend appropriate insurance coverage.

Data Protection

To determine potential risk, adjusters need a full understanding of the potential damage a breach could inflict. They will evaluate the sensitivity and volume of data your business handles, as well as the industry regulations that apply to your operations.

Adjusters delve into the specific technological infrastructure of your business. They analyze the complexity and interconnectedness of your systems, as well as the presence of any legacy or outdated software that may pose vulnerabilities. Understanding the intricacies of your network architecture allows adjusters to assess the potential impact and spread of a cyber attack.

Cybersecurity Policies

Another crucial factor is your organization's cybersecurity measures. Adjusters will review your security systems, protocols, and employee training programs to gauge the effectiveness of your defenses against cyberthreats. They may also assess your incident response plans and your ability to recover and restore operations in the event of a breach.

Breach History

Furthermore, adjusters consider the history of cyber incidents your business has experienced. Past breaches, whether successfully mitigated or not, can influence their perception of your risk profile. Similarly, your business's financial stability and ability to invest in cybersecurity defenses are relevant considerations

Identity Resilience and Your Risk Profile

As adjusters continue to adapt to an increasingly aggressive risk landscape, they are looking for proof of sophistication and reliability in your security strategies.

“Carriers are being hounded down by their clients because of aggressive ransomware attacks,” says Jennings. “Underwriters are increasingly looking at companies’ contingency plans, and ability to recover from serious breaches.”

In the realm of cyber insurance risk assessment, critical system backups and contingency plans play a crucial role. Adjusters consider the backup strategies implemented by your organization to evaluate your level of preparedness. Having secure and regular data backups reduces the impact of a breach and facilitates the recovery process.

Cyber Insurance Carriers are encouraging their clients to look to reliable backup and recovery partners who can offer solutions beyond atypical full-system-restore. Solutions that offer migration between IAM tenants or between different IdPs altogether provide an added layer of security, and are a serious consideration in companies’ risk profiles.

What's Next in Cyber Insurance

As cyber threats evolve, the landscape of cyber insurance will continue to adapt. Adjusters will delve deeper into evaluating a business's risk management practices, incident response capabilities, and employee training programs.

Furthermore, the rise of emerging technologies, such as artificial intelligence and machine learning, will impact cyber insurance risk assessment. These technologies can improve the efficiency and accuracy of detecting potential threats, leading to more informed underwriting decisions.

However, it is important to note that the ever-changing nature of cyber threats also presents challenges for cyber insurance providers. As new attack vectors and techniques emerge, insurers must constantly update their policies and coverage options to keep pace with the evolving threat landscape. This requires a deep understanding of the latest cyber threats and the ability to anticipate future risks.

Ultimately, staying informed about evolving cyber insurance trends and understanding how adjusters view your risk will be key to securing comprehensive coverage for your business. By prioritizing cybersecurity measures, investing in cloud security, and ensuring robust backup strategies, you can effectively navigate the ever-changing landscape of cyber insurance.

Remember, cyber insurance is not a one-time purchase. It requires ongoing evaluation and adaptation to keep up with the ever-evolving cyber threat landscape. Regularly reviewing your coverage and reassessing your risk management practices will help ensure that your business remains adequately protected in the face of new and emerging cyber risks.