How Data Loss Prevention Helps Maintain Cybersecurity Insurance

Cybersecurity insurance has developed as a vital component of organizational risk management in today’s ever-changing cyber threat landscape. However, as the frequency and severity of cyberattacks and data breaches rise, insurance firms face escalating costs. This causes them to reconsider their strategies, implementing stricter procedures to reduce risk and increase profitability. As a result of these strategic adjustments, businesses must reassess their methods to sustain cyber insurance while keeping costs affordable. One of the key factors in maintaining cybersecurity insurance coverage is the recognition of the need for data loss prevention (DLP).

The Pitfalls of Relying Solely on Cyber Insurance

In the past, many insurance companies were new to the cybersecurity field and provided appealing pricing. As a result, some companies performed risk assessments and determined that relying mainly on insurance, rather than hiring security teams, developing security policies, and purchasing security measures, would be more cost-effective. Unfortunately, this strategy lacked foresight, as cybersecurity disasters include not only direct expenses, but also major long-term effects with no possibility of remediation, including loss of customer confidence and reputational harm. For example, the word SolarWinds still often conjures up images of the Russian intelligence service’s intrusion two years ago, rather than recognizing the company’s success and excellent solutions.

Another direct result of this faulty cybersecurity strategy was that insurance companies had to face higher claims than expected. As a result, they raised their rates dramatically to avert future losses, expecting that their customers would continue to be ignorant. To protect themselves better, many insurance companies also began requiring confirmation of strong security controls not just before signing coverage agreements, but also when processing claims. As a result, firms with weak security policies and procedures after initially obtaining coverage, but receive no pay when the insurance company realizes that the requisite security measures were not in place at the time of the incident.

Demonstrating Effective Security Controls to Cyber Insurance Firms

Businesses use numerous security strategies and frameworks to show insurance providers that they are not a risk for cyber insurance. Implementing comprehensive security controls based on acknowledged industry standards and frameworks is one such way. Following the NIST Cybersecurity Framework, for example, provides a complete framework for enterprises to assess and enhance their cybersecurity posture. Companies can demonstrate their commitment to effective risk management, incident response, and continuing security improvement by aligning their security processes with the NIST Framework’s principles.

However, adhering to a cybersecurity strategy is not the only thing that can be done. In addition to framework adoption, businesses can demonstrate their proactive approach to cybersecurity by conducting frequent security assessments and audits and being able to demonstrate them to insurers. Thorough vulnerability assessments, penetration testing, and third-party audits assist in identifying potential gaps and vulnerabilities in an organization’s infrastructure and systems. By addressing these gaps and demonstrating a commitment to continuous improvement, businesses may demonstrate to insurance carriers that they are actively mitigating risks and reducing the possibility of cyber disasters.

The Helpful Role of Compliance

The field of cyber insurance becomes more navigable for organizations working in highly regulated sectors, where tight requirements must be met at the risk of severe consequences or denial of crucial licenses. These entities are already obligated to show other stakeholders their commitment to cybersecurity, and they frequently undertake external audits for this purpose. This scenario is especially relevant in institutions in fintech, banking, healthcare, higher education, the military, and others where compliance is critical. Such businesses are required by law to secure personally identifiable information (PII), personal health information (PHI), and other personal data and confidential data kept within their systems, which necessitates the use of comprehensive cybersecurity policies and systems.

The measures used by organizations to ensure regulatory compliance with standards such as PCI DSS, HIPAA, or GDPR can be persuasive when dealing with cyber insurance providers. The good news is that these compliance measures are well aligned with the use cases for cyber insurance. The same methods and solutions used to meet compliance criteria can also be used to strengthen a company’s case for cyber insurance. It’s like hitting two birds with one stone. Additionally, arranging for cyber insurance can help an organization position itself well if it intends to pursue stringent compliance standards in the future, allowing for potential corporate expansion and growth.

The Complex World of Information Security

The field of cybersecurity has several dimensions that require consideration. While malware, ransomware attacks, and phishing are frequently highlighted in the media, they actually represent a small part of the overall picture. Cyberattacks are often multiple undertakings, with malicious hackers first gaining access to a system through means such as unprotected network port access or online vulnerabilities. Once inside, these cybercriminals gradually explore more security flaws in both technological systems and human-related vulnerabilities, such as weak authentication, eventually targeting sensitive data.

The requirement for numerous levels of defense adds to the complexity of cybersecurity and we’ve moved far on from the days when antivirus software and a firewall were the only pieces of cybersecurity technology needed to keep businesses secure. Businesses must protect themselves by technological means, such as adopting zero-trust network access control and deploying cloud security measures, but they must also handle the human component, which includes cybersecurity risks linked with human behavior. Addressing the human factor, on the other hand, presents additional hurdles because, despite substantial training efforts, there is still a persistent risk of employees falling prey to well-crafted social engineering. As a result, measures like data loss prevention become critical weapons in an organization’s armory, acting as visible evidence of a robust and, crucially, comprehensive security ecosystem when presented to insurance companies.

The Key Role of Data Loss Prevention

Data loss prevention solutions, which protect data in use, data in motion, and data at rest, are much more than just helpful data protection measures and a key part of a comprehensive data security strategy. In negotiations with insurance companies, they emerge as unsung heroes, acting as proof of compliance in the case of data leaks and the consequent requirement for compensation. The importance of these solutions stems from their capacity to address one of the most difficult and risky aspects of IT security from the standpoint of cyber insurance: the human factor.

Cybersecurity experts widely acknowledge that the weakest link in the security chain is not the technology itself, but rather human fallibility. The bulk of data breaches are caused by human error rather than sophisticated operations of hackers. Surprisingly, even amateurs have been responsible for big cyberattacks, such as the Capital One hack, which was carried out by a rookie looking to flaunt her talents to her peers.

When everything else fails, DLP solutions serve as the last safeguard against fatal errors, lowering the chance of human mistakes or insider threats leading to severe repercussions. They, for example, stop employees from accidentally sharing sensitive information with attackers by prohibiting operations such as copying data to the clipboard. If a disgruntled employee attempts to use their business laptop to send companies’ proprietary information to a competitor over personal email, DLP solutions, including device control, not only prevent this possible intellectual property breach in real time but also notifies companies immediately about the attempt. This demonstrates the power of DLP software such as Endpoint Protector by CoSoSys in preventing data leakage and data exfiltration, and cyber insurance service providers acknowledge its importance in cyber risk mitigation.