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3 Ways to Reduce the Costs of Cyber Insurance

Tyler Vogelsberg • Feb 14, 2020

The thought of your business being hit by ransomware, malware or hacking attack may frighten you. These attacks can affect any size of business in any sector, and the costs of repairing commercial cyber damage can be high.

If you take out cyber insurance, you will have peace of mind of being protected. However, this insurance doesn't always come cheap. Before you take out a policy, review these steps to ensure you get cost-effective coverage.

1. Assess and fix areas of weakness

If you don't work in the IT security sector, then you won't have in-depth experience of your own security systems and how robust they are. Your IT personnel or consultant will have measures in place to protect your network and data, but you may not be sure how well these measures will work if talented hackers target your business.

Also, security systems that were up to speed a while ago may not be fit for purpose now. Your system may have weak spots that allow access to cyber criminals who develop new ways of breaching networks all the time.

At this stage, it often helps to run a risk assessment on your IT system and its security. You can do this in-house if you have the skills. Or, you can bring in a cyber security specialist.

As well as assessing your system and helping you fix weak areas, an external specialist also helps you evaluate the impact of a cyber attack. They can tell you how it might affect your business and what kinds of costs it would bring.

If you can improve your internal security, then you might be able to reduce cyber insurance costs. If you implement industry-standard preventative measures, then an insurer may lower your premium because you pose a lower risk.

2. Check if you have other cover already

While cyber insurance is a specialist product, it isn't the only coverage that potentially pays out after a technology breach. In some cases, other business insurance policies may also cover you for some events.

For example, if you have business interruption coverage, this policy contributes towards your costs if you can't operate for a while. If your current policy accepts problems caused by cyber attacks, like data breaches, then you may already have some level of financial protection in place to cover this problem.

Some commercial crime insurance policies also offer useful technology coverage. For example, a policy may include employee or third-party computer crime which could cover some cyber attacks.

The fact that your current policies give you some protection against cybercrime doesn't mean that you shouldn't take out a specialist policy. However, you might reduce your costs by leaving out some risks that other policies include already.

3. Ask an insurance broker for advice

At this stage, it makes sense to talk to an insurance broker. They can help you assess your financial risk needs and find companies that might give you a discount for any extra security steps you take.

A broker can also help you understand the terms of any other business insurance policies you have that may cover some cyber costs. This helps you ensure that you have adequate and relevant coverage.

Bear in mind that a broker also works across the market. They can access a wide variety of cybercrime policies and insurance companies, saving you some money and ensuring you have the right cover in place.

If you’re considering cyber insurance, talk to Westralian Insurance. We’ll source the right cyber insurance policy for your business, for the right price.

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