Recovering from a cyberattack is difficult under the best of circumstances. But it’s particularly taxing for smaller companies, which may not have the financial resources they need to recover as quickly as possible. Today, cyber insurance is becoming an increasingly popular element of a larger recovery plan for small and mid-sized businesses. The right insurance can offer much-needed financial protection and support in the aftermath of an incident, helping to speed your return to normal while lowering the financial impact.
Let’s take a closer look at the role of cyber insurance in cyberattack recovery, how it aligns with the “Recover” function of the NIST Cybersecurity Framework, and what to look for when choosing an insurance provider.
The National Institute of Standards and Technology (NIST) Cybersecurity Framework is widely used by small and mid-sized companies to manage and mitigate cybersecurity risks. One of the framework’s five core functions, Recover, focuses on developing and implementing plans to maximize your resilience so you can quickly normalize services and operations after a cybersecurity incident. The purpose of the Recover function is to help ensure you’re ready to bounce back from an attack quickly while minimizing business disruption and financial loss.
Cyber insurance can be a vital element of your recovery strategy. The right policy can provide the financial resources and professional help to ensure you survive an attack with as little long-term damage as possible.
Integrating cyber insurance into recovery planning can provide smaller companies with several important benefits.
One of the most immediate - and valuable - advantages of cyber insurance is the financial protection it provides. The financial hits from a cyberattack can surface quickly from a range of areas, including:
Cyber insurance policies typically cover at least some of these expenses, giving you a buffer that frees you to focus on operational recovery rather than stressing about the financial aftermath.
Along with financial support, many cyber insurance providers offer the services of a network of cybersecurity experts, which can include forensic investigators, incident response teams, and legal advisors. These professionals can help you assess the scope of the breach, contain the threat, and implement effective recovery measures. Having quick access to this support can significantly reduce the time it takes you to restore normal business operations and ensure that your recovery process is both fast and efficient.
Some smaller businesses are subject to industry-specific regulations, which may specify how quickly you must report a breach and even specify recovery measures and processes. Cyber insurance providers can help you comply with these requirements by offering guidelines on best practices and mandating certain risk management strategies as part of your policy. For example, your policy might require that you have specific types of data backups in place, or that you use encryption technologies. These proactive measures help ensure you’re better prepared to recover from a cyberattack while keeping you in alignment with any relevant regulations.
While cyber insurance can be highly beneficial, as with almost any type of resource, there are also potential pitfalls to consider. It’s important to be aware of these before integrating cyber insurance into your recovery strategy.
Not all cyber insurance policies are created equal. Some policies may have exclusions for certain types of attacks or may not cover particular costs, such as regulatory fines. If you assume you’re fully protected, you might find yourself vulnerable in specific scenarios. For example, some policies may not cover social engineering attacks, where employees are tricked into disclosing sensitive information. It’s essential to carefully review any policy you’re considering in order to understand exactly what is - and isn’t - covered.
Even when an insurance policy covers an incident, the coverage may be capped at a certain limit. If recovery costs exceed that limit, you’ll be responsible for the difference. This can be particularly problematic for smaller companies, where recovery costs can easily outstrip policy limits. (That’s especially true with sophisticated attacks like ransomware.) When choosing a policy, check to ensure that coverage limits are sufficient for your unique risk profile.
Relying too heavily on cyber insurance can lead to complacency in other areas of cybersecurity. It’s important to remember that cyber insurance isn’t a substitute for your own robust security practices. While insurance can help mitigate the impact of an attack, preventing attacks in the first place should always be your primary focus. Maintaining comprehensive cybersecurity measures can minimize the likelihood of needing to use your insurance.
Cyber insurance can significantly enhance recovery efforts after a cyberattack when properly integrated into your recovery plan. Here are some tips for leveraging cyber insurance effectively:
Consider cyber insurance as part of your broader recovery strategy. Plan for how you’ll use insurance coverage to respond to an attack, considering the level of financial support and access to expert resources you’ll receive.
After an incident, it’s critical to collaborate closely with your insurer to ensure that the recovery process is as smooth as possible and that you maximize the benefits of your policy. Many policies require you to take specific steps immediately after an attack to qualify for coverage.
As cyber threats evolve, so should your cyber insurance policy. Plan to review your policies regularly to ensure that they offer adequate coverage for emerging threats like ransomware, phishing, or supply chain attacks.
Selecting the right cyber insurance provider is crucial to ensuring the policy can effectively support your recovery efforts. Here are a few factors to consider when choosing a provider:
Cyber insurance can play an essential role in your cyberattack recovery planning, giving you a safety net to help you rebound from attacks more quickly, and minimize the financial strain. It’s vital to select the right insurance provider and policy, regularly review your coverage, and avoid relying solely on insurance to mitigate cybersecurity risks. By integrating cyber insurance into a broader, proactive security strategy, you’ll enhance their resilience against the growing threat of cyberattacks.
You're invited to join us on October 24th at 1PM EST for "Recover: Building Resilience -
NIST Framework Recovery Strategies for Sustainable Growth".