In business, data is king. Companies rely on data to make decisions about everything, from marketing strategy to product development. As companies increasingly store data electronically – even if on third-party cloud services – the need for comprehensive data protection has never been greater.
As the number and intensity of cyberattacks increase, the stakes for cyber insurance brokers and their clients also increase. To address this rapidly growing threat, regulators are raising the requirements clients must meet to get or renew a comprehensive policy. It has also become increasingly important for agents to ensure they are providing clients with adequate policies and coverage terms when it comes to Cyber, as one wrong move could mean an errors & omissions lawsuit against them.
To be properly protected by cyber insurance, businesses must prioritize data management. This means ensuring sensitive information is properly encrypted and stored and access is carefully controlled.
Here is how agents can help more clients meet cyber insurance multi-factor authentication (MFA) requirements.
What Is Multi-Factor Authentication (MFA)?
Cyber insurance covers losses incurred due to cybercrime. This can include data breaches, cyberattacks, and other types of online fraud. Multi-factor authentication (MFA) is a security measure requiring users to provide two or more forms of authentication to access an account or system.
MFA plays a critical role in deterring cyber threats. It provides an extra layer of security beyond the username/password combination, requiring users to provide additional authentication factors such as one-time codes or biometrics. This approach makes it much harder for attackers to gain unauthorized entry, significantly deterring malicious activities and ensuring systems remain secure.
What Clients Need to Meet Rigorous MFA Requirements
To meet the rigorous multi-factor authentication requirements for insurance, clients must first ensure their organization is up to date on security best practices. Here is an overview of what clients need to have in place to qualify for cyber insurance.
Clear Definition of What Data Needs to Be Collected
One of the primary qualifications cyber insurance carriers require of potential policyholders is a concise, clear definition of the data they are collecting.
Insurance carriers have two reasons for requiring such a clear and specific definition. First, insurance companies are in the business of assessing risks, and a clear definition of data enables an insurer to properly assess inherent risks. Adding to that, a clear definition minimizes the potential for a breach to ever occur.
How Data Will Be Used and Segmented
A process for strategically managing data builds consumer trust, decreases the chance of a breach, protects against costly penalties and lawsuits, and enhances branding. Today’s consumers are protective of their data, and well-defined data management policies help build their trust. Conversely, a lack of trust can quickly damage a company’s reputation.
An effective strategy for managing data is to segment it. This term refers to dividing data into smaller segments, thereby making it easier to see where it is stored and who has access to it. The process of data segmentation also makes it more difficult for hackers to confiscate all of a company’s data. Clear guidelines for accessing and using data enable businesses to protect themselves from potential data misuse.
Data Is Encrypted and Maintained Across Multiple Servers in Different Locations
Insurance carriers understand encryption is a complex process, and data is the most secure when it is encrypted in motion (during data transmission) and at rest (while being stored on a server or device).
In all industries, it is considered a best practice to store the same data in multiple servers in different locations. The company can access a data breach from a different location if a data breach affects one server. Furthermore, storing data in multiple locations prevents the complete loss of data during a disaster.
While data encryption and storing data across multiple servers in different locations requires more effort for companies on the front end, it enables them to quickly recover from a data breach on the back end. Proper encryption tools allow companies to secure their data, positioning them well for the best possible cyber insurance coverage.
A System for Regularly Backing up Data
Acquiring and retaining cyber insurance coverage requires businesses to show they have an adequate system in place to back up their data. Insurance companies will look for a regular backup schedule that ensures backups are safely and securely stored. They are also looking for verification of a plan for restoring data if the system fails or if there is some type of crisis.
These steps demonstrate a business is proactive in protecting and managing its data, which will increase the chance of acquiring cyber insurance. The right cyber insurance is the second layer of protection from a data breach or other cyber-related incident.
Data Only Managed by Authorized Users
Companies should be able to show insurers their data will only be managed by authorized users. For example, only certain people in HR departments should be able to access an employee’s personal data. Some companies ensure data privacy by enlisting a third-party service to affirm security and conduct security checks. Third-party security checks provide the added benefit of identifying potential insider threats.
These steps demonstrate to insurers how the company limits access to sensitive data only to those who need it to fulfill their job descriptions.
Established Procedures for Destroying Outdated or Unnecessary Data
Established procedures for destroying outdated and unnecessary data protect the company’s confidential information and frees up storage space. Formal procedures for deleting unusable data are a best practice for data management, as outdated or unnecessary data in storage could be confiscated and used either for criminal activity or to exploit the company. Furthermore, old data takes up valuable space that companies can use for other data management purposes.
As complex as data management can be, the right strategies, such as multi-factor authentication, data encryption, regular backups, and established cybersecurity procedures, will help your company acquire cyber insurance and keep it in force.
The experts at Relay are eager to work with you to take the right steps to manage your data and pave the way for getting cyber insurance protection, so contact us today!