• Support
  • Login
  • Contact
  • Blog
  • Support
  • Login
  • Contact
  • Blog
SecurityScorecard SecurityScorecard
  • Products
    PRODUCTS
    • Security Ratings
      Identify security strengths across ten risk factors.
    • Security Data
      Get actionable, data-based insights.
    • Security Assessments
      Automate security questionnaire exchange.
    • Attack Surface Intelligence
      NEW
      On-demand contextualized global threat intelligence.
    • Automatic Vendor Detection
      Uncover your third and fourth party vendors.
    • Cyber Risk Quantification
      Translate cyber risk into financial impact.
    • Reporting Center
      Streamline cyber risk reporting.
    • SecurityScorecard Marketplace
      Discover and deploy pre-built integrations.
    SERVICES
    • Active Security Services
      Test your security controls.
    • Cyber Risk Intelligence
      Partner to obtain meaningful threat intelligence.
    • Digital Forensics & Incident Response
      Prepare to respond to any threat.
    • Third-Party Risk Management
      Reduce risk across your vendor ecosystem.
    BUY NOW
    • Compare All Plans
      Choose a plan that's right for your business.
    • Try Free Account
      Make informed decisions with confidence.
    • Buy Pro Now
      Add automated event responses.
    • Buy Business Now
      Expand on Pro with vendor management and integrations.
    • Request Enterprise Demo
      See the capabilities of an enterprise plan in action.
    icon__SSClogoMark icon__SSClogoMark

    Understand and reduce risk with SecurityScorecard.

    Free account sign up
  • Solutions
    BY USE CASE
    • Compliance
    • Cyber Insurance
    • Digital Forensics
    • Due Diligence
    • Enterprise Cyber Risk
    • Executive-Level Reporting
    • Incident Response
    • Regulatory Oversight
    • Third-Party Risk
    BY INDUSTRY
    • Critical Infrastructure
    • Enterprise
    • Financial Services
    • Government
    • Healthcare
    • Insurance
    • Retail & Consumer
    • Technology
    Help your organization calculate its risk
    View All Solutions
  • Customers
    OUR CUSTOMERS
    • Customer Overview
      Trusted by companies of all industries and sizes.
    • Peer Reviews
      Find out what our customers are saying.
    SUCCESS AND SUPPORT
    • Customer Success
      Receive award-winning customer service.
    • Support
      Get your questions answered by our experts.
    COMMUNITY
    • SecurityScorecard Connect
      Engage in fun, educational, and rewarding activities.
    • Connect Login
      Join our exclusive online customer community.
    icon__SSClogoMark icon__SSClogoMark
    Understand and reduce risk with SecurityScorecard.
    Free account sign up
  • Partners

    Partner Program Overview

    Partner with SecurityScorecard and leverage our global cybersecurity ratings leadership to expand your solution, deliver more value, and win new business.

    Learn more
    • Locate a Partner
      Access our industry-leading partner network.
    • Value-Added Resellers
      Enter new markets, deliver more value, and get rewarded.
    • Managed Service Providers
      Meet customer needs with cybersecurity ratings.
    • ISAC Partner Program
      Learn more about the industries we support and ISAC member benefits.
    • Technology Alliances
      Access innovative solutions from leading providers.
    • SCORE Portal Login
      Use the SCORE Partner Program to grow your business.
    • SecurityScorecard Marketplace
      Find a trusted solution that extends your SecurityScorecard experience.

    Understand and reduce risk with SecurityScorecard.

    Free account sign up
  • Resources
    RESOURCES
    • Resource Center
      Explore our cybersecurity ebooks, data sheets, webinars, and more.
    • SecurityScorecard Blog
      Read the latest blog posts published weekly.
    • Research & Insights Center
      Access our research on the latest industry trends and sector developments.
    • SecurityScorecard Academy
      NEW
      Complete certification courses and earn industry-recognized badges.
    TOOLS AND DOCUMENTATION
    • Free Security Rating
      Get your free ratings report with customized security score.
    • Product Release Notes
      Visit our support portal for the latest release notes.
    • Free Account Signup
      Start monitoring your cybersecurity posture today.
    • Chrome Extension
      NEW
      Show the security rating of websites you visit.
    • Assessments ROI Calculator
      Calculate the ROI of automating questionnaires.
    Trust begins with transparency. Take a look at the data that drives our ratings.
    Learn more
  • Company

    Working at SecurityScorecard

    Committed to promoting diversity, inclusion, and collaboration–and having fun while doing it.

    Join our team
    • About Us
      SecurityScorecard is the global leader in cybersecurity ratings.
    • Leadership
      Meet the team that is making the world a safer place.
    • Press
      Explore our most recent press releases and coverage.
    • Events
      Join us at any of these upcoming industry events.
    • Policy Insights
      Raising the bar on cybersecurity with security ratings.
    • Careers
      APPLY TODAY
      Come join the SecurityScorecard team!
    • Contact Us
      Contact us with any questions, concerns, or thoughts.
    • Trust Portal
      Take an inside look at the data that drives our technology.
    • Help Center
      We are here to help with any questions or difficulties.
Request a demo
SecurityScorecard SecurityScorecard
  • Support
  • Login
  • Contact
  • Blog
  • Support
  • Login
  • Contact
  • Blog
SecurityScorecard SecurityScorecard
  • Products
    PRODUCTS
    • Security Ratings
      Identify security strengths across ten risk factors.
    • Security Data
      Get actionable, data-based insights.
    • Security Assessments
      Automate security questionnaire exchange.
    • Attack Surface Intelligence
      NEW
      On-demand contextualized global threat intelligence.
    • Automatic Vendor Detection
      Uncover your third and fourth party vendors.
    • Cyber Risk Quantification
      Translate cyber risk into financial impact.
    • Reporting Center
      Streamline cyber risk reporting.
    • SecurityScorecard Marketplace
      Discover and deploy pre-built integrations.
    SERVICES
    • Active Security Services
      Test your security controls.
    • Cyber Risk Intelligence
      Partner to obtain meaningful threat intelligence.
    • Digital Forensics & Incident Response
      Prepare to respond to any threat.
    • Third-Party Risk Management
      Reduce risk across your vendor ecosystem.
    BUY NOW
    • Compare All Plans
      Choose a plan that's right for your business.
    • Try Free Account
      Make informed decisions with confidence.
    • Buy Pro Now
      Add automated event responses.
    • Buy Business Now
      Expand on Pro with vendor management and integrations.
    • Request Enterprise Demo
      See the capabilities of an enterprise plan in action.
    icon__SSClogoMark icon__SSClogoMark

    Understand and reduce risk with SecurityScorecard.

    Free account sign up
  • Solutions
    BY USE CASE
    • Compliance
    • Cyber Insurance
    • Digital Forensics
    • Due Diligence
    • Enterprise Cyber Risk
    • Executive-Level Reporting
    • Incident Response
    • Regulatory Oversight
    • Third-Party Risk
    BY INDUSTRY
    • Critical Infrastructure
    • Enterprise
    • Financial Services
    • Government
    • Healthcare
    • Insurance
    • Retail & Consumer
    • Technology
    Help your organization calculate its risk
    View All Solutions
  • Customers
    OUR CUSTOMERS
    • Customer Overview
      Trusted by companies of all industries and sizes.
    • Peer Reviews
      Find out what our customers are saying.
    SUCCESS AND SUPPORT
    • Customer Success
      Receive award-winning customer service.
    • Support
      Get your questions answered by our experts.
    COMMUNITY
    • SecurityScorecard Connect
      Engage in fun, educational, and rewarding activities.
    • Connect Login
      Join our exclusive online customer community.
    icon__SSClogoMark icon__SSClogoMark
    Understand and reduce risk with SecurityScorecard.
    Free account sign up
  • Partners

    Partner Program Overview

    Partner with SecurityScorecard and leverage our global cybersecurity ratings leadership to expand your solution, deliver more value, and win new business.

    Learn more
    • Locate a Partner
      Access our industry-leading partner network.
    • Value-Added Resellers
      Enter new markets, deliver more value, and get rewarded.
    • Managed Service Providers
      Meet customer needs with cybersecurity ratings.
    • ISAC Partner Program
      Learn more about the industries we support and ISAC member benefits.
    • Technology Alliances
      Access innovative solutions from leading providers.
    • SCORE Portal Login
      Use the SCORE Partner Program to grow your business.
    • SecurityScorecard Marketplace
      Find a trusted solution that extends your SecurityScorecard experience.

    Understand and reduce risk with SecurityScorecard.

    Free account sign up
  • Resources
    RESOURCES
    • Resource Center
      Explore our cybersecurity ebooks, data sheets, webinars, and more.
    • SecurityScorecard Blog
      Read the latest blog posts published weekly.
    • Research & Insights Center
      Access our research on the latest industry trends and sector developments.
    • SecurityScorecard Academy
      NEW
      Complete certification courses and earn industry-recognized badges.
    TOOLS AND DOCUMENTATION
    • Free Security Rating
      Get your free ratings report with customized security score.
    • Product Release Notes
      Visit our support portal for the latest release notes.
    • Free Account Signup
      Start monitoring your cybersecurity posture today.
    • Chrome Extension
      NEW
      Show the security rating of websites you visit.
    • Assessments ROI Calculator
      Calculate the ROI of automating questionnaires.
    Trust begins with transparency. Take a look at the data that drives our ratings.
    Learn more
  • Company

    Working at SecurityScorecard

    Committed to promoting diversity, inclusion, and collaboration–and having fun while doing it.

    Join our team
    • About Us
      SecurityScorecard is the global leader in cybersecurity ratings.
    • Leadership
      Meet the team that is making the world a safer place.
    • Press
      Explore our most recent press releases and coverage.
    • Events
      Join us at any of these upcoming industry events.
    • Policy Insights
      Raising the bar on cybersecurity with security ratings.
    • Careers
      APPLY TODAY
      Come join the SecurityScorecard team!
    • Contact Us
      Contact us with any questions, concerns, or thoughts.
    • Trust Portal
      Take an inside look at the data that drives our technology.
    • Help Center
      We are here to help with any questions or difficulties.
Request a demo
SecurityScorecard SecurityScorecard
BLOG

The Basics of Cybersecurity Insurance – What You Need to Know

02/25/2020

In recent years, cybersecurity has become a necessity for organizations across a wide range of industries and sectors. From mom-and-pop shops along America’s main streets to Fortune 500 companies, all businesses are potential targets for cybercriminals. As a result, more corporations are investing in cyber insurance as a method to cover the rising expense of a cyber attack and protect their overall bottom line. Let’s take a look at the value of cybersecurity insurance, explore why it’s become such a critical component of many organization’s cybersecurity risk management strategy, and learn about the steps your organization can take now to be prepared.

Cyber attacks are on the rise

Over the past decade, cyber attacks have grown at outstanding rates. In 2020, the COVID-19 pandemic also greatly exacerbated the number of threats within the digital landscape with nearly 75% of security professionals claiming that their third-party-related cybersecurity risks increased after making the move to a remote workforce.

There are several key factors that are the driving forces behind the rise of cyber incidents, including:

  • Increased exposure: In an ever-increasing digital landscape, software companies are writing more and more lines of code for companies of all sizes that can be utilized for cyber attacks.
  • Hacker innovations: Cybersecurity technologies adjust their techniques after the threat happens, enabling hackers to modify their hacking techniques for optimum success. Cybersecurity providers take a reactive approach to attacks and cannot predict when new issues will arise.
  • Elusive hackers: Hackers rarely phish where they live. Often, they hack across borders, making it nearly impossible for law enforcement agencies to catch them.

This all means one thing for the cybersecurity insurance market – it will skyrocket. In fact, a recent report by Androit Market Research suggests that the industry will grow from $4 billion to over $23 billion during the next six years alone as more firms invest in cyber protection.

What is cybersecurity insurance?

Cybersecurity insurance, also known as cyber risk insurance or cyber liability coverage (CLIC), is designed to cover a business’ liabilities in the event of a data breach involving sensitive data. This can include credit card numbers, Social Security numbers, and protected health information (PHI). In addition to covering legal expenses and fees, cyber insurance can help notify clients about a data breach, fix damaged computer systems, and restore the affected customers’ personal identities.

What does cybersecurity insurance cover?

In recent years, the cybersecurity risk insurance market has expanded to encompass two overarching types of policy coverage: first- and third-party written coverage.

First-party coverage is similar to commercial property insurance in that it covers the additional costs that an organization may incur in the event of an attack. This can include the cost of notifying customers, repairing damaged hardware or software, and general loss of income.

Third-party coverage can help organizations cover the costs that follow after a data breach occurs, such as lawsuits and other legal fees. This includes coverage around compliance and regulatory fines, privacy lawsuits, or breach of contract or negligence claims.

How much does cybersecurity insurance cost?

The cost of a cybersecurity insurance policy will be dependent upon a number of factors. Today, many insurance providers rely on metrics such as security ratings to underwrite policies and determine cost and coverage. Security ratings allow providers to gain a more complete understanding of your organization’s network and the various steps you are taking to protect critical data and assets.

Organizations can take advantage of this by monitoring their own cybersecurity posture on an ongoing basis. In addition to their impact on policy cost and coverage, security ratings can help your organization identify vulnerabilities and determine what needs to be done to improve cyber hygiene. Additionally, continuously monitoring your posture with security ratings can help your organization ensure that it is maintaining compliance with required mandates, in order to cut down on unnecessary costs.

Do I need cybersecurity insurance?

What businesses need cybersecurity insurance? The short answer is every business. All types of commercial entities, including not-for-profit organizations, corporations, educational and financial services institutions, can benefit from having cyber insurance if they collect, process, and store financial or personal customer or employee data.

This sensitive information makes both small and large companies potential targets. All it takes is one successful attack to cause a costly breach of data.

Some reasons you should consider getting cybersecurity insurance include:

  • Cyber incidents happen often: According to a recent Argo cyber insurance survey, almost two-thirds of small and mid-sized enterprises (SMEs) have suffered a cyber attack.
  • Data is more valuable than oil: Data reigns supreme in today’s economy. It can result in increased revenue, cost savings, and efficiency. However, it isn’t covered by standard property insurance. Cyber insurance offers coverage in the event of a data breach.
  • Your electronic system isn’t covered: If a ransomware attack occurs, your electronic system downtime will not be covered by run-of-the-mill business interruption insurance. Cyber insurance fills in the gaps and covers lost profits associated with a cyber-related systems outage.

The future of cybersecurity insurance

The cybersecurity insurance sector currently covers a small percentage of losses that businesses incur after a cyber attack. However, the rise in malicious cyber activity has the cost of a data breach at nearly $4 million, making it evident that cybersecurity insurance needs will substantially increase.

The cyber insurance sector is trending upward and technologies are evolving at a lightning-fast pace. Regulation trends, the development of cyber risk pools, and increasing awareness about cyber risks will all aid in the bright future of this industry.

How SecurityScorecard can help

Cybersecurity insurance is essential for companies of all sizes. Not only does it help businesses to mitigate risk exposure by offsetting the costs associated with a cyber attack, but it also helps to notify customers and employees in the event of a cyber incident. If you are a business owner, now is the time to invest in this critical insurance.

In order to cut down on unnecessary costs and guarantee that they are getting the best coverage possible for their needs, organizations should leverage objective cybersecurity measures such as security ratings to monitor their entire IT ecosystem. By ensuring that your organization is not only compliant but proactive when it comes to mitigating risks, you can help underwriters and providers to gain a clearer understanding of your organization and its needs when it comes to cybersecurity insurance.

The rise in cyber attacks has put a clear emphasis on the need for effective cybersecurity risk management, and cyber insurance is a critical component of that. Organizations should take the steps today to defend their critical data and assets from emerging threats.

Return to Blog
Join us in making the world a safer place.
FREE ACCOUNT SIGN UP
Products
Solutions
Customers
Marketplace
Partners
Resources
Company
Trust Portal
Security Ratings
Login
Blog
Contact
Careers

SecurityScorecard
Tower 49
12 E 49th St
Suite 15-100
New York, NY 10017

[email protected]

United States: (800) 682-1701
International: +1(646) 809-2166
Social-linkedin Social-facebook Twitter Instagram Youtube