How Your Data Protection Strategy Can Lower Your Cyber Liability Insurance Premiums

Prodatix October 10, 2024 0 Comments

Let’s take a look at this scenario: you wake up one morning, go to your office, and out of nowhere, you find out that your entire business is paralyzed.

Your systems are frozen, your data is encrypted, and a faceless attacker is demanding a ransom. It’s the kind of scenario you hope never happens, but with cyberattacks on the rise, it’s a reality many businesses face.

Thankfully, cyber liability insurance can cover some of the costs. But let’s be honest—premiums are climbing. But did you know that you could actually lower your premiums by simply strengthening your data protection strategy?

That’s where professionally managed data backups with immutability come in.

In this post, we’ll show you how the right data protection solution doesn’t just protect your business, it can also reduce your insurance premiums so that you can direct these resources to your strategic initiatives.

What Is Data Breach Insurance?

Data breach insurance is a policy designed to protect your business from the financial fallout of a cyberattack. If your company is targeted, cyber liability insurance helps cover costs like legal fees, customer notifications, credit monitoring, and depending on your policy’s terms, the ransom payments.

What Is Included in Data Breach Coverage?

Depending on your policy and the premiums you pay, most cyber liability insurance includes:

  • Breach response costs: Things like notifying customers, offering credit monitoring services, and managing public relations.
  • Legal fees: In case you face lawsuits or regulatory fines.
  • Business interruption: Compensation for lost income if your operations are disrupted due to an attack.
  • Ransom payments: Some policies cover the cost of paying a ransom, although prevention is always better.

However, before your insurer covers these expenses, they want to make sure you’re doing your part to protect your business. In other words, insurance is designed to be your last hope of saving your business from complete failure.

It’s not going to protect your business from attacks, though. In fact, malicious actors intentionally target organizations with insurance policies because they know that they will get their ransom from the insurance company.

Not to mention that without managed data protection solutions, your premiums will keep increasing, and in case an attack actually takes place, your premiums will get even higher the following year.

There’s another concern that you need to be fully aware of: insurance won’t help you recover from the reputational damage of the attack as both customers and investors will lose confidence in your business.

How Can I Comply with My Policy Requirements?

Insurance companies want to know that you’re taking steps to reduce your risk of an attack. Meeting their requirements often involves implementing key cybersecurity measures. Here are the big ones:

1. Data Backups

Backing up your data isn’t just a good practice—it’s a must if you want to comply with your policy. Insurance providers often require that your business performs regular backups and has a plan to restore data in case of a cyber incident.

But what really sets your protection apart? The answer is immutable backups. Immutable backups can’t be altered or deleted, which makes them a game-changer when it comes to preventing ransomware from wiping out your data.

2. Multi-Factor Authentication (MFA)

MFA is a simple yet powerful tool. It requires users to verify their identity using multiple methods before they can access your systems.

So, instead of just asking for a username and password combo, the portal could also ask the user to provide additional verification, like with a code sent to the person’s email address or authenticator app.

MFA adds an extra layer of security that greatly reduces the chances of a successful cyberattack, especially those involving phishing or insider threats.

3. Cybersecurity Awareness Training

Cybercriminals love exploiting human error. That’s why many insurance providers require businesses to provide cybersecurity training to their employees.

Teaching your staff how to recognize phishing attempts and other threats is essential for promoting a cyber-resilient workplace culture.

4. Access Management and Controls

Who has access to what? Insurers want to see that you’re limiting access to sensitive data to only those who absolutely need it. Strong access management policies, like the principle of least privilege, help prevent unauthorized users from accessing critical systems or data.

5. Vulnerability Management

Hackers are always on the lookout for security weaknesses. Regular vulnerability scanning and patch management are key to keeping your systems secure.

Many policies also require you to show that you’re actively identifying and fixing potential vulnerabilities.

How Do I Lower My Cyber Insurance Premiums?

Okay, so how do you actually reduce those premiums?

From our experience, it’s all about lowering your risk profile. Insurance companies want to know that you’re doing everything you can to prevent an attack. If they see that you’ve implemented strong cybersecurity measures—like those mentioned above—your premiums could drop.

But one of the most effective ways to lower your premiums is by having professionally managed data backups with immutability. Here’s why:

  • Immutable backups make it nearly impossible for ransomware to erase or modify your data, which minimizes the risk of catastrophic data loss.
  • Managed data protection means you’re not just relying on internal IT teams—you have experts like Prodatix handling everything from backup management to disaster recovery. This level of expertise not only reduces the risk of downtime but also shows insurers that you’re serious about protecting your business.

When you combine Prodatix’s Veeam-powered data protection services with the 3-2-1-1-0 rule (three copies of your data, two on different media, one offsite, one immutable, and zero errors), you’re setting yourself up for maximum resilience, and that resilience is something insurance companies will appreciate and reflect it in your insurance costs.

Choosing the Right Partner

Not all data protection solutions are created equal.

When choosing a partner to manage your data backups, look for one that specializes in not just backup and recovery, but in ransomware prevention through immutable backups.

Prodatix’s expertise, backed by our Veeam certifications and Tier 3 data center, gives you the security and peace of mind your business needs.

Working with a partner like Prodatix can help ensure you’re complying with insurance requirements and avoiding common pitfalls that could lead to costly breaches.

Conclusion

Lowering your cyber liability insurance premiums doesn’t have to be complicated.

Prodatix enables you to deploy professionally managed, immutable data backups and take a big step toward reducing your risk and insurance costs.

Ready to protect your business and reduce your cyber insurance premiums?

Contact Prodatix today to learn more about our Veeam-powered data protection solutions.

AboutMatt Bullock
Matt is the VP of technical sales for Prodatix. He's been an entrepreneur for the past 30 years in the technology (hardware and software) industry. He's focused on educating clients on the need for a complete data protection solution and a tested recovery plan to ensure business continuity.