12 must-have cybersecurity controls to lower your insurance costs
Cybersecurity is now a ubiquitous topic, about which countless insurance articles and promotions find their ways to educate the public with the benefits, advantages, and costs of Cyber insurance coverage. Devised in the fairly recent digital era where cyber-crime is no longer restricted to mere scare tactics, today’s hackers use more sophisticated methods that are developed to use for extracting not only ransom money, but at times, even used to destroy competitors of your business.
Under such situations, it is completely understandable that this newly refined insurance policy will have steeper costs to pay for, as the risk profile and actuarial data has not filtered sufficiently into the calculation of risk profiles. Due to this, it makes more sense to find ways to reduce cyber-insurance costs. But how will you do this?
Here, we shall discuss ways you can persuade your insurance provider that you are not only eligible, but a perfect candidate for getting the best coverage options from your cyber-insurance policy.
Foundational Cybersecurity Controls
Today, cybersecurity isn’t just about keeping hackers out—it’s about convincing insurance companies that your business isn’t a ticking time bomb. Cyber insurers are picky, sniffing around for solid defenses before they cut you a good insurance deal. Get the right controls in place first, and you’ll not only sleep better but maybe save some amount on premiums. Here’s the lowdown on four must-haves: Multi-Factor Authentication, Endpoint Detection, Incident Response Plans, and Employee Training.
1. Multi-Factor Authentication (MFA)
What it is: MFA is like having a double-lock on your door, you need a password, and a code texted to your phone, or email to access systems.
Why it's Important: Hackers stole your password? No problem! MFA stops them dead on tracks. Studies show it can block nearly all account takeover attempts by verifying credentials twice, mitigating account takeovers to near zero.
How it lowers insurance costs: Insurers are obsessed with MFA because it significantly lowers breach risks. Do you have MFA on your key systems? By rolling out MFA, you’re showing insurers you’re serious about security, which can lead to lower premiums.
2. Endpoint Detection and Response (EDR)
What it is: EDR is your digital watchdog, monitoring suspicious activities on laptops, servers, even your receptionist’s phone, and stopping threats quickly and timely.
Why it's Important: Old-school antivirus is useless against slick hacker attacks these days with multiple entry points. EDR is smarter, catching advanced threats before they hack and destroy your data.
How it lowers insurance costs: Insurers see EDR as a sign you’re proactive about threat detection. This makes it a premium-slasher, and soe won’t even cover you without it. It’s a step up from traditional tools and is a smart investment.
3. Incident Response Planning
What it is: A step-by-step playbook for IT Administrators to implement when hackers attack your business. It helps spot the breach, kills it, cleans up, and communicates to stakeholders and customers on recovery measures taken.
Why it's Important: Without a plan, your business remains clueless during a breach. A good plan keeps damages low and gets your business back to normal quickly.
How it lowers insurance costs: Insurers want to see a tested plan. If you have a solid plan then you’re less likely to cost them millions, so they might cut your rates. And they even offer better coverage too.
4. Employee Training and Awareness
What it is: Regular training teaches your crew to dodge traps like phishing emails or fake links, turning them into your first line of defense.
Why it's Important: Your team can be a liability with one bad click that can lead to huge cyber-risk. Training makes them sharp, alert in spotting a fake email and saves your business from ransomware.
How it lowers insurance costs: Insurers know trained employees significantly lower risks. It also shows you’re serious about your business doing regular training which makes you a safer bet, for lower insurance premiums.
Key Cybersecurity Measures for Insurance Savings
Following the foundational controls, let's explore four additional cybersecurity measures that beef up your company’s network security. These measures aren't just about sweet-talking insurers into cheaper rates; they are useful for preventing hackers from gaining access. After the basics like MFA and EDR, additional layers increase defenses to make your business seem like a digital fortress to insurers. Each layer strengthens your defenses and signals to insurers that your organization is a lower-risk investment. Here are the four layers—Data Encryption, Access Controls, Backups, and Vulnerability Management. These will keep your data safe, and your insurance premium lean.
5. Data Encryption
What it is: Encryption scrambles your data, especially customer credit cards or employee SSNs into coded form which can be decrypted by a special digital key. It applies to data stored on systems and transmitted across networks.
Why it’s important: If hackers manage to access your files, encryption makes them useless without the decryption key. Like locking your data in a safe, it will be very difficult for hackers to brute force their way into your data.
How it lowers insurance costs: Insurers are impressed by encrypted systems, which means the business is less likely to suffer from lawsuits, preventing million-dollar disasters. Many insurers offer reduced premiums or enhanced coverage terms to organizations employing robust encryption, often requiring it as a prerequisite to getting a policy.
6. Access Controls and Least Privilege
What it is: Access controls restrict system permissions, while the principle of least privilege ensures individuals receive only the access necessary for their roles—preventing unnecessary exposure to sensitive areas.
Why it’s important: Even if a hacker manages to gain access from a low-ranking personnel member, they can’t access critical sectors. This limits the damage from hacking and also escalates into better security next time.
How it lowers insurance costs: Naturally, insurers appreciate the effort that your business has taken these loss prevention measures. So, they might ease up on your insurance rates. Especially with a layered, tiered-level security standing as a vault-door.
7. Regular Backups and Recovery Testing
What it is: Backups are datacenters kept out of grid, creating secure copies of essential data, stored separately. Recovery testing makes sure you can go back to previous data after a ransomware crash or server crash wipes out the OS systems.
Why it’s important: Good backups mean swift restoration without giving-in to ransom demands. Previous recovery testing proves your data is ready for restoration, preserving business continuity.
How it lowers insurance costs: Insurers favor organizations with proven recovery capabilities, as they incur lower losses during incidents. When you show them proof of regular tests as some insurers mandate, you can be looking at lower premiums.
8. Vulnerability Management
What it is: Vulnerability management can be contracted to 3rd parties who inspect your tech for weak spots (old software, bad configuration settings) and fix these problems through regular updates and maintenance.
Why it’s important: Proactively resolving vulnerabilities closes entry points for attackers, before they strike. Updated settings and software prevent software vulnerability from being exploited.
How it lowers insurance costs: Insurers favor businesses that stay ahead of the IT curve, protecting themselves from threats and avoiding data-related lawsuits. Which means it is a win-win situation for insurers to offer reduced rates for your business.
Advanced Cybersecurity Controls to Optimize Insurance Costs
We are now wrapping up the list with the final four critical controls that protect your business and appeal to your insurance. Each one tackles a unique aspect of cybersecurity, from containing breaches to managing external risks, while showing insurers you’re serious about minimizing vulnerabilities.
9. Firewalls and Network Segmentation
What it is: Firewalls monitor, and filter network traffic based on set rules, acting like a barrier against unauthorized access. Network segmentation splits your network into separate zones, restricting movement between them to limit the spread of an attack.
Why it’s important: Together, these tools stop intruders at the gate and keep damage isolated if they get in. Think of it as locking both the front door and the rooms inside your house.
How it lowers insurance costs: Insurers see this as a solid defense strategy. By reducing the chance of a breach spreading, you’re less likely to face massive claims, which can lead to lower premiums or better terms.
10. Security Information and Event Management (SIEM)
What it is: SIEM systems gather security data from your entire network, analyzing it to spot threats in real time and alert you to trouble.
Why it’s important: It’s like having a security camera that not only watches but also yells when something’s wrong. Catching issues early cuts down on damage and recovery time.
How it lowers insurance costs: Insurers love fast detection—it means smaller losses. Showing you’ve got SIEM in place can convince them you’re a safer bet, potentially trimming your rates.
11. Patch Management
What it is: This is the process of regularly updating software and systems with patches to fix known security holes.
Why it’s important: Attackers often exploit outdated systems. Keeping everything patched is like fixing the cracks in your walls before someone pries them open.
How it lowers insurance costs: A consistent patching routine tells insurers you’re closing easy entry points for hackers. That diligence can translate into more favorable premium pricing.
12. Third-Party Risk Management
What it is: This means evaluating and controlling the security risks that come from vendors, partners, or anyone else with access to your data or systems.
Why it’s important: A breach through a third party can hit you just as hard as one from within. Checking their security is like making sure your neighbors lock their doors too.
How it lowers insurance costs: Insurers know third-party breaches are a growing problem. Proving you’ve got this under control can ease their worries and possibly lower your costs.
Why These Matter for Insurance
These four controls—firewalls and segmentation, SIEM, patch management, and third-party risk management—build a strong, layered defense. They limit damage, catch threats early, fix weaknesses, and secure your external connections. Insurers notice when you’ve got these bases covered, often rewarding you with reduced premiums or better coverage options. It’s a practical way to protect your business and your bottom line.
Conclusion
It makes perfect sense to upgrade your IT infrastructure to make use of these protection measures which can benefit your company in other ways than just lowering your insurance costs. For this purpose, you should consult your IT administrator or hire an IT company that specializes in hardware troubleshooting and upgrading.
But of course, Insurance Advisor is always ready to help you navigate the world of cyber insurance. You can also get help from our insurance agents by simply dropping an inquiry or requesting a cyber quote on our website.