2024 Cybersecurity Outlook
Cybersecurity insurance is a type of coverage that protects businesses from the financial consequences of cyberattacks, data breaches and other cyber risks. Cybersecurity insurance requirements are constantly evolving as the threat landscape changes and new regulations emerge. In 2024, businesses can expect to face more stringent and complex cybersecurity insurance requirements.
Some of the possible cybersecurity insurance requirements in 2024 are:
- Higher premiums and deductibles for businesses that do not meet certain cybersecurity standards or have a history of cyber incidents. For example, businesses that use outdated or unsupported software, have weak passwords or encryption, or have suffered previous cyberattacks may have to pay more for their insurance or face higher deductibles in case of a claim.
- Mandatory cyber risk assessments and audits by independent third-party experts or regulators. These assessments and audits may evaluate the business’s cybersecurity posture, identify vulnerabilities and gaps, and provide recommendations for improvement. Businesses may have to submit these reports to their insurers or regulators as proof of compliance or as a condition for obtaining or renewing their insurance coverage.
- Compliance with specific frameworks or guidelines. These may include the National Institute of Standards and Technology (NIST) Cybersecurity Framework, the International Organization for Standardization (ISO) 27001, or the European Union’s General Data Protection Regulation (GDPR). These frameworks or guidelines provide best practices and standards for managing cyber risks and protecting data privacy and security. Businesses may have to demonstrate that they have implemented these frameworks or guidelines in their operations and systems or face penalties or sanctions for non-compliance.
- Inclusion of cyber resilience and incident response plans in the insurance policy, as well as regular testing and updating of these plans. Cyber resilience and incident response plans outline how the business will prevent, detect, respond to, and recover from cyberattacks. These plans should also include roles and responsibilities, communication channels, escalation procedures, backup and recovery strategies and contingency plans. Businesses may have to include these plans in their insurance policy as part of their coverage and test/update them periodically to ensure their effectiveness and relevance.
- Coverage for a wider range of cyber risks, such as ransomware, denial-of-service attacks, social engineering, cloud computing and supply chain disruptions. These cyber risks pose new challenges and threats to businesses as they rely more on digital technologies and interconnected networks. Businesses may have to seek additional or specialized coverage for these cyber risks, as they may not be covered by their standard insurance policies.
- Exclusion or limitation of coverage for certain cyber risks, such as state-sponsored attacks, acts of war or terrorism, or intentional or negligent acts by the insured or its employees. These cyber risks are considered beyond the business’ control or responsibility and may not be covered by their insurance policies. Businesses may have to bear the full cost of these cyber risks if they occur or seek alternative solutions such as government assistance or legal action.
Cybersecurity insurance is not a substitute for good cybersecurity practices, but rather a complementary measure that can help businesses mitigate the monetary impact of cyberattacks. Businesses that want to stay ahead of the curve and secure their cyber insurance coverage in 2024 should start preparing now by assessing their current cyber risk exposure, implementing effective cybersecurity measures and reviewing their existing insurance policies.