This blog post is part of a series of cyber incident top tips, you can view them all here.
Cyber insurance provides financial protection against the aftermath of cyber incidents such as data breaches or system disruptions. It typically covers recovery costs, including legal fees, fines, and customer compensation. While insurance doesn’t prevent attacks, it helps manage the financial impact and supports recovery efforts.
However, understanding your policy and its requirements is crucial. Recent trends show businesses relying on insurance as a catch-all solution, only to discover they don’t meet the policy requirements and receive no compensation when attacked.
Will Your Insurance Pay Out?
To ensure that your cyber insurance will provide the coverage you expect, it is essential to scrutinise the policy’s terms and conditions. Unfortunately, many policies come with exclusions that could leave you vulnerable. Here are some common exclusions we have encountered:
1. ‘A hacker who specifically targets you alone’
Does this exclusion mean you aren’t covered when the latest widespread outbreak affects thousands of systems? This ambiguous wording could potentially leave you without coverage in many common attack scenarios.
2. ‘Any failure by a cloud/infrastructure provider’
With a ‘cloud first’ strategy, this exclusion means that incidents involving your cloud service provider are not covered. This is particularly worrying given the reliance on cloud services in modern IT environments.
3. ‘Any individual hacker within the definition of you’
This legal language typically refers to insiders or employees. If your policy excludes incidents involving insiders, you’re unprotected against one of the most common and damaging types of cyber threats.
4. ‘The use by you of any software or systems that are unsupported by the developer’
This exclusion means that if you have any outdated or unsupported software in your environment, such as a single Windows XP device, your entire policy could be invalidated. This highlights the importance of keeping all of your systems up to date.
5. ‘Acts of foreign enemies, terrorism, hostilities, or warlike operations (whether war is declared or not)’
This exclusion is particularly troubling. If the loss adjusters (or incident responders) trace an attack back to a source IP from a foreign nation such as Russia, your claim might be denied under this clause.
Given these potential pitfalls, it is clear that relying on cyber insurance without a thorough understanding of your policy is risky business. This is where a cyber incident response retainer comes into play, offering a valuable complement to your insurance strategy.
How a Cyber Incident Response Retainer Can Complement Cyber Insurance
A cyber incident response retainer provides proactive and reactive services designed to help you manage and mitigate the impact of a cyber incident. Here’s how it can complement your cyber insurance:
Expert Assistance During an Incident
When a cyber incident occurs, having immediate access to expert incident responders can be invaluable. They not only handle the investigation and recovery but also help implement security controls from the start to better secure your organisation.
Proactive Preparation and Risk Mitigation
Retainers often include proactive services such as vulnerability assessments, penetration testing, and security training. These services help identify and address weaknesses in your defences, reducing the likelihood of a successful attack and, by extension, the need to file a claim.
Faster Response Times
With a retainer in place, you have a pre-established relationship with a response team, ensuring faster response times during a crisis. This prompt action can be crucial in limiting the scope and damage of an incident.
Compliance and Regulatory Support
Incident response specialists assist with the complexities of regulatory requirements and compliance issues that often follow a data breach. This support can help you avoid penalties and further financial loss. Breaches often occur due to blind spots in maintaining industry standards. This is especially true in ransomware cases, where root cause analysis often highlights these weaknesses. Maintaining systems to industry standards is crucial for preventing such vulnerabilities and ensuring regulatory compliance.
Enhanced Policy Terms
Working with a cyber incident response team can provide insights that help you negotiate better terms with your insurance provider. Demonstrating a proactive approach to cyber security might lead to more favourable policy conditions and reduced premiums.
Conclusion
While cyber insurance is an essential component of a strong cyber security strategy, it should not be relied upon in isolation. Understanding the limitations and exclusions of your policy is crucial. By having both bases covered, you can build a more resilient cyber security strategy that addresses both the operational and financial aspects of cyber risk management.
Need Some Help?
Contact us today to discuss your cyber security needs and explore how our comprehensive solutions can help protect your data and provide you with peace of mind.
This blog post is part of a series of cyber incident top tips, you can view them all below:
- Tip 01: Taking advantage of ransomware’s biggest secret!
- Tip 02: Securing your backups from vulnerabilities
- Tip 03: Beware of automated response dangers!
- Tip 04: The importance of disconnecting yourself during a breach
- Tip 05: How to integrate your anti-virus protection with SIEM
- Tip 06: Ensure that your insurance covers cyber incidents
- Tip 07: Preparing for the worst – rebuilding after a major ransomware attack
- Tip 08: Who you should call first during a cyber breach
- Tip 09: Hold onto the evidence – why securing system logs is essential for cyber incident response
- Tip 10: What you need to know to make sure your penetration testing is effective
- Tip 11: Why tabletop exercises are crucial for incident response
- Tip 12: Famous last words – misconceptions before a major cyber breach