Cybersecurity insurance is often met with a yawn or a puzzled look until the moment you realize you can’t afford it or, worse, you needed it yesterday. This seemingly mundane topic has taken on new urgency as the cost of cyber liability premiums has soared in recent years.
In 2021 alone, the cost increased by 25.5% year-over-year, and 2022 saw even more dramatic hikes. While the rate of increase has somewhat stabilized in 2023, the fact remains that cyber insurance is becoming increasingly expensive and indispensable for businesses of all sizes.
Why it matters: The escalating cost of cybersecurity insurance isn’t just a line item on a budget; it’s a strategic concern that intersects with risk management, compliance, and overall business resilience. In this era of surging cyber threats, ransomware attacks, and data breaches, CIOs and their CISO counterparts are increasingly becoming involved in assessing proper coverage for their organizations.
- The surge in remote work has led to an increase in cyber threats and subsequent insurance claims, forcing insurers to hike prices and tighten underwriting requirements. Given the average cost of a data breach is $4.45 million, going without cyber insurance is a high-risk gamble.
- Insurers may require evidence of robust cybersecurity measures, such as multi-factor authentication, regular patching schedules, and incident response plans, as prerequisites for coverage. Technology leaders are often the ones who have to validate the implementation of these measures, making their role crucial in not just obtaining but also maintaining cyber insurance coverage.
- Companies with standalone cyber insurance policies were less likely to report a breach in the past year, highlighting the importance of a dedicated approach to cybersecurity.
Go Deeper —> What’s Driving the Rising Cost of Cyber Liability Insurance? – Kolide
