5 Ways to Save Money on Cyber Insurance Premiums

Given the increase of cyber threats in today’s world of technology, the importance of cyber insurance cannot be overstated. With threats looming, businesses of all sizes are at risk of data breaches, cyberattacks, and other malicious activities that can wreak havoc on their operations and finances. Cyber insurance provides financial protection against such incidents, covering costs related to data recovery, legal fees and even reputation management. However, obtaining sufficient coverage can sometimes come with substantial premiums. Fortunately, there are several tactics an organization can implement to reduce these costs.

1. Risk Assessment and Mitigation: Before purchasing cyber insurance, conduct a thorough risk assessment of your organization’s digital infrastructure. Understand the process of your business operations, the sensitivity of the data you handle and your overall exposure to cyber threats. Identify potential vulnerabilities and take steps to mitigate them. Implementing robust cybersecurity measures not only reduces the likelihood of a cyber incident but also demonstrates to insurers that you are responsible.
2. Employee Training and Awareness: Employees remain one of the primary causes of security breaches. Malicious threat actors are becoming more savvy with their social engineering schemes (Read about MGM’s recent attack). Investing in comprehensive cybersecurity training programs to raise awareness about best practices and identifying threats can significantly reduce the risk of incidents. Insurers may offer discounted premiums to organizations who conduct regular training, as their employees are less likely to fall victim to phishing scams or other social engineering tactics.
3. Regular Security Audits and Updates: Stay proactive by conducting regular security audits and assessments of your IT systems. Patching software vulnerabilities and updating security protocols on a regular basis can shut down potential entry points for cyber-attacks. Insurers often reward businesses that demonstrate a commitment to maintaining up-to-date and secure IT infrastructure with lower premiums.
4. Comparison Shopping and Negotiation: Don’t settle for the first insurance quote you receive. Take the time to shop around and compare offerings from multiple insurers. Different providers may offer varying levels of coverage at different price points. Additionally, consider leveraging a broker for your insurance. Brokers work with a variety of providers and can often tailor a plan that is very specific to your business needs, at the best price.
5. Bundling Policies: If your business already holds other insurance policies, such as general liability or errors and omissions, inquire about bundling options. Many insurers offer discounts for bundling multiple policies together, which can lead to significant cost savings on the plan.

While cyber insurance is a necessity for businesses large and small, it doesn’t need to be overly expensive. By implementing just a handful of the above strategies, businesses can manage and reduce their cyber risk while keeping insurance premiums manageable.