Internet Providers Must Prepare as Cybersecurity Insurance Costs Rise
Internet providers invest in insurance to protect themselves and their customers. But as the number of hack attacks increase, the danger is that insurance premiums could become too high for some rural providers to afford. Ransomware attacks especially have been on the rise and damaging in 2021. A cybersecurity strategy may be the best way to avoid attacks and control costs.
“Claims are up – the amount of claims and the frequency of claims. The average ransomware claim is roughly $300,000 or so. A couple years ago, you’re looking at a third of that or less,” said Matt Gilbert, risk advisor for UNITEL Insurance, who spoke during a recent NRTC-hosted webinar.
Cybercrime Magazine estimates there is a ransomware attack on a business every 11 seconds and the rate is increasing. “Fifty-five percent of attacks on businesses are on businesses that have less than 100 employees,” said Curtis Strole, NRTC Managed Services’ executive director, Customer Relations, during the webinar. “Eighty percent of ransomware victims suffer repeat attacks.”
One way for NRTC members to cut costs is to implement security measures. NRTC, working with partner Dynetics, can help members install systems and certify them for insurance purposes. “If you’re not going through those motions, it’s a red flag [for insurance carriers],” Gilbert said. In recent months, insurance carriers have been declining to renew policies or to offer quotes for new business for those without safeguards, he said.
Gilbert shared a “Cybersecurity Insurance Checklist” during the webcast. The document helps providers determine if there are holes in security, “and really self-grading some of those different practices. As you build out your service plans, try to take yourself from a ‘C’ to an ‘A,’” he said. Checklist items include steps such as anti-phishing protection, strengthening passwords, keeping anti-virus software up to date and others.
Even with full attention on security and certification, expect premiums to rise. Gilbert gave the example of a cybersecurity policy for a term of July 1, 2020, to July 1, 2021, that cost $28,574 has risen to $32342 at renewal time. “Even when you do things right, there has to be a tolerance or expectation that the market is changing,” he said.
NRTC members who would like to review the Cybersecurity Insurance Checklist or learn more about how to protect themselves from ransomware should contact NRTC Managed Services at email@example.com.