The Expert Podcast

Yes, cyber insurance rates are increasing. According to business insurance, cyber rates are climbing. How much? Well, cyber coverage is up 60 percent for optimal risk, meaning that there are less severe risk profiles, and 100 percent or more for less optimal ones. So if you have a risky business with very limited cyber protection, you may find that your rate quote is 100 percent higher than it would have been a year ago.

Now, if you have an existing policy, many times the rate increase won't be that much because you've already proven to have some type of risk protection. In fact, they may require it as part of their ongoing coverage, so you don't get non-renewed. So, cyber rates are climbing. The sooner you get into the market and have some kind of coverage, even if it's basic, you're likely to be protected from all of the premium increases. At the same time, you'll also have more time elapsed of having access to the resources that your insurer will offer you.

The rate increases are dramatically affected by technical factors, meaning that underwriting is going to use a lot of technical platforms to analyze your business. It won't just be a questionnaire you answer, sign, and send in as a PDF. They may actually interact with your server and system to see what kind of protections you have. They may do some pen tests on your company. They may want to know what your firewalls are, and they may not take your word for it. They might just simply send pings to your various servers to see what you have for coverage.

So prior to looking at a policy, you might want to do some internal housekeeping. That might get your rate lower and could even get you approved for a policy that you couldn’t qualify for in the past. Keep an eye on the market for cyber insurance. If you are a business, within the next two years, whether you have coverage now or not, you will almost certainly have to have coverage—either by demand, desire, or requirement from clients, government agencies, or just the market in general.

So, if you don't have a policy now, govern yourself accordingly. You probably will have to have one within a couple of years. It's not going to be optional. So, start doing things now that will protect your budget from having to pay too much for a policy because, a) you haven't had one before, or b) you don't have the procedures and policies in place. In fact, I'm sure that if you have bought car insurance for the first time in a long time, one of the first questions they ask is, "Have you been without coverage for some period of time?" That's going to be a common question also for cyber liability insurance: "Have you been without coverage?" Because if you have, that might negate your ability to get a policy or make it more expensive.

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