The Expert Podcast

Cyber insurance is much different from other types of business lines insurance policies, and this article from Property and Casualty 360 talks about how policyholders reducing their risk is crucial to getting a good cyber policy and maintaining the security of your company. Even though you have insurance, you don’t want to have an event that triggers a claim. For example, just because you have fire insurance doesn’t mean you’re going to be lighting fires in your warehouse. Instead, you want to protect yourself against the loss in the first place.

Even if your claim is paid, it's going to be quite an event and disruption to your business enterprise. This is much more prevalent in the cyber risk landscape. In fact, the subheadline of this article states that today’s businesses need to address security issues before they apply for a policy. Think about that—before you even apply for cyber insurance, it’s recommended that you take steps to enhance the security of your cyber systems. This is very good advice.

When a potential insurer looks at your business as a risk, if they see you’ve already taken into account many of these cyber risks, they will consider you to be a better potential insured. You might get better coverage, a lower premium, or even qualify for the policy in the first place. Some companies might reject you if you don’t have these security measures in place. Certainly, you could put them in place after applying, but if insurers see that you’ve already taken this seriously, it puts you ahead of other potential policyholders.

In fact, the security measures you implement to protect your business will simply add to what the insurance company requires. Insurers will provide you with suggestions and sometimes mandatory requirements to maintain security in your business. If these requirements are added on top of what you’ve already implemented, your company will be much safer overall.

Another key takeaway from this article is that cyber insurance is becoming more essential for organizations. To take on an organization as a client, insurers require that strong security controls are already in place. Otherwise, companies will face astronomical premiums—if they can get coverage at all. Certainly, you can hire a cyber expert to implement these security measures, but if you do this internally, it becomes part of your corporate culture. Not only will this improve cybersecurity, but it will also lead to a more disciplined corporate structure.

Better cybersecurity practices will positively impact sales by preventing missed revenue opportunities. They will also improve employee retention—a major concern for companies today. Keeping good employees is crucial, and a well-structured, secure work environment helps achieve this. Employees who value stability and security will stay, while those who are less disciplined may leave on their own. You don’t want to retain underperforming employees while losing top talent. By implementing strong cyber risk policies, businesses can achieve both improved security and increased revenue.