Cybercriminals pose a serious problem for all kinds of organizations today. Though the word may conjure images of shadowy figures behind keyboards, cybercrime is conducted by large, sophisticated criminal enterprises, often with sponsorship by state governments. Worse yet, these enterprises continue to expand their efforts. In 2023, ransomware attacks doubled again, and phishing emerged as the number one way in which threat actors attack organizations.
Why is cyber insurance essential for large enterprises and small and medium businesses (SMBs) using legacy MFA?
John Horn, Director of Cybersecurity at leading analyst firm Datos Insights, stated, “As cyber risk continues to elevate, legacy MFA solutions are being defeated regularly by sophisticated phishing attacks. Many enterprises are left with heightened business risk and interruption, needing to move to phishing-resistant MFA solutions.”
A single attack can be devastating for SMBs. Some experts even state that over 60% of attacked SMBs go out of business within six months of being attacked. Large companies can also suffer many adverse consequences of a cyberattack, including financial losses, reputational injury, damaged customer relationships, and regulatory fines. Cyber insurance can help to mitigate these risks for both types of firms.
Organizations looking for the most advanced protection against cybercrime must move away from legacy solutions and adopt next-generation tools that remove the human element from the login process. Enterprises that rely on legacy MFA are more likely to experience a breach and more likely to need cyber insurance to recover.
What is the cost of cyber insurance?
- First-party coverage refers to losses that may result from data breaches, theft, extortion, or destruction and directly impact the attacked organization. It usually covers costs related to data recovery or replacement, cyber extortion, forensic investigations, and lost income due to business disruption. Costs incurred from notifying affected customers, managing public relations, legal fees, and regulatory fines are also included.
Much like other insurance policies, the rate for your cyber insurance policy is impacted by your organization’s security history and other criteria that indicate how likely the organization is to experience a breach. Due to the global escalation in ransomware attacks, rates are already increasing 50 – 100% without factoring in your organization’s security posture. Additionally, 79% of insured organizations reported that their insurance rate increased upon application or renewal, and half of respondents were required to enhance their IAM and MFA tools to qualify.
Given that dynamic, utilizing next generation MFA is crucial for securing the best policy — both by preventing breaches and addressing the weak point of human error. Like a bad driver with a DUI will find acquiring car insurance difficult, organizations that suffer a breach may be unable to find a policy, and 83% of organizations suffered two or more breaches last year. Implementing next generation MFA from Token Ring delivers the only passwordless, FIDO-2 compliant biometric wearable authenticator that stops phishing and social engineering attacks that result in data breaches.
Which risks does a cyber insurance policy typically cover?
A comprehensive cyber insurance policy includes coverage for losses or expenses resulting from a cyberattack. These may include losses due to:
- Destruction of digital assets
- System repairs or replacements
Which risks does a cyber insurance policy not cover?
Link between cyber insurance and solid cyber defenses
- Data encryption
- Incident response plans
- Regular vulnerability assessments and penetration tests
- Security awareness training
In an expanding risk landscape, the continuity and longevity of a business depends on its ability to withstand cyber threats. Cybersecurity measures and cyber insurance are both essential to this effort.
Reliance on legacy solutions hinges on the unrealistic expectation that users will somehow recognize and overcome every new and sophisticated hacking attack they receive via emails, text messages, and malicious webpages. This unfulfilled promise of legacy MFA solutions is reflected in the soaring costs of the average data breach, now $9.4 million for U.S. companies. Enterprises and SMBs that invest in cyber insurance and strong defenses like Token Ring’s biometric MFA can protect themselves from devastating financial losses. Confronted with these rising costs, it is clear why cyber insurance is not just a nice-to-have for modern organizations, but a need-to-have.