As enterprises attempt to navigate an ever-evolving security landscape, it can be challenging to protect everything. In addition, the recent uptick in cyberattacks has highlighted the need for multiple layers of security. Because of this concern, most large organizations have obtained cyber security insurance.
What is cyber insurance?
Cyber insurance is a policy designed to protect businesses from internet-based risks such as data breaches, cyber-attacks, and other online threats.
According to IDC, cyber insurance is utilized by a slight majority of organizations worldwide, with 70% required to have a separate policy just for ransomware.
While currently, no federal laws require companies to purchase cyber insurance; there are state-level regulations that may mandate certain types of coverage or impose other requirements on companies.
As attacks become more frequent and sophisticated, regulators will likely insist on cybersecurity compliance protocols for critical systems and enterprise cyber insurance policies.
What does Zero Trust have to do with cyber insurance?
With the increasing severity and frequency of cyber attacks and the expanding attack surface, governing bodies are implementing more stringent compliance requirements and holding organizations’ feet to the proverbial fire for inadequately protecting personal information, especially in the healthcare industry, where protecting highly sensitive patient data is a significant regulatory concern.
Cyber insurance used to be relatively inexpensive, but that is changing. The rising demand for coverage is forcing insurers to increase premiums. Research by GlobalData estimates that by 2025, cyber insurance will reach more than $20 billion in worldwide premiums, up from $7 billion in 2020.
In addition, cyber insurers are raising the bar on policy standards as the expense of cybercrime incidents continues to skyrocket along with the threat of increased compliance requirement fines. They want to see that a company is taking its cyber security measures very seriously by conducting a network security audit, ensuring service providers are maintaining regulatory compliance, and investing in advanced cybersecurity strategies.
This is where Zero Trust joins the party.
Zero Trust reduces the cyber risk
Zero trust’s “Never Trust, Always Verify” mantra mandates that organizations shouldn’t automatically trust any user or device, either inside or outside their network. Unlike the “trust but verify” touted by traditional security models, which rely heavily on parameter defenses, Zero trust sees no parameters or borders. Instead, it assumes threats are anywhere and everywhere.
If you consider that organizations without Zero trust spent an average of 42% more recovering from a data breach last year than those with mature deployments, Zero trust’s borderless approach provides peace of mind to security-wary underwriters as it mitigates risk while improving cyber hygiene.
As the threat landscape expands and regulators toughen their policies, CSIOs are looking to meet compliance standards, have an added layer of protection, and more advanced ways to protect their data.
Combined, Zero trust and cyber insurance defend an organization’s critical assets and applications and bolster its existing cyber defenses while reducing and transferring the financial risk away from its business. It’s a win-win for insurers and organizations alike.
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