3 Reasons Why Now is the Time to Buy a Cyber Insurance Policy
by Jeff Parent, RPLU, CPLP, ARM, MLIS, ERIS, AIS
Vice President, Client Executive - CCIG
Hackers and cybercriminals are setting their sights on small and medium-sized businesses, as businesses with 11 to 40 employees saw an almost fourfold increase in the number of cyber attacks in 2022.
With a seemingly nonstop barrage of digital threats, knowing how to protect your business can be difficult. It hasn’t helped that over the past few years, the cyber insurance market has been a rollercoaster. Rates rose in tandem with escalating digital threats, driving up the cost of insurance and potentially chilling interest in policies from small and medium-sized businesses.
However, because insurers implemented stricter underwriting guidelines and requirements for insured businesses, we are now seeing the benefits of more robust security policies and procedures. Insurance companies are more confident in issuing policies, which has led to a nine percent drop in the cost of cyber insurance in 2023.
Here are three critical reasons why now is the time to consider a cyber policy for your business.
#1. Construction, Architecture, and Design Firms Aren’t Immune to Risks
Many construction companies, architecture firms, design businesses, or contractors think they aren’t a target for cybercriminals because their data isn’t as sensitive as the information held by healthcare companies or financial institutions. However, more than one in six construction companies reported a cyber attack in 2021, and that number is on the rise.
Hackers target these organizations for many reasons, including the large sums of money that exchange hands during a project, the lack of digital security infrastructure, and the use of mobile devices on job sites (which can increase a company’s vulnerability to attacks).
It’s crucial to protect your organization and your data now – before you have to deal with the technical, financial, and reputational fallout from an incident.
#2. Pricing Drops Won’t Last Forever
Risks change, the market fluctuates, and new cyber tactics appear daily, so it’s impossible to predict how long favorable cyber insurance pricing will last.
One up-and-coming risk is rogue artificial intelligence (AI), a tactic where hackers use AI to generate code for malware and emails for phishing attacks. The ever-evolving cybersecurity landscape means businesses have to stay ahead – and stay aware.
Anecdotally, we see more carriers writing policies, increased competition from carriers, and less stringent underwriting requirements. But new challenges pop up all the time that can impact how carriers issue and price policies, so businesses have an opportunity to leverage today’s market to secure cyber coverage.
#3. Pre-Loss Services Are a Significant Benefit
Most cyber insurance policies today come with pre-loss services like endpoint detection to monitor potential threats, system scanning to identify possible vulnerabilities, and strategies to strengthen your risk profile. Every step towards bolstering your security posture is vital to protecting your business.
If a cyberattack does occur, insurance companies have preferred vendors – like cybersecurity experts, forensic accountants, and more – who can jump into action and help you mitigate the fallout from a security incident.
The cost of finding and securing those vendors on your own would be monumental, especially when the clock is ticking. One study found that the average cost of a data breach for companies with less than 500 employees is over $3 million.
Find Out More About Cyber Insurance
If you have questions about cyber insurance, the CCIG team is here to support you. CCIG's team of expert advisors has specific experience supporting construction companies with their cyber insurance needs.
Reach out to firstname.lastname@example.org for a conversation about your company – CCIG is here to help protect your business today and in the future.