What the Business Pros Know

How Security Posture Impacts Insurance Premiums

October 25, 2024

Andrew Gilstrap

In an era where digital connectivity is woven into every facet of our lives, the importance of protecting personal and organizational data is more critical than ever before. With the rise of sophisticated cyber threats and data breaches, understanding how to shield sensitive information from unauthorized access is crucial.

High insurance premiums for small to medium sized businesses can be influenced by a variety of factors. As a result, there are several events that can lead to increased insurance premiums, including the security measures that are in place to protect your organization from cyber threats.

Small to medium sized businesses must remain especially vigilant, as nearly half (43 percent) of cyberattacks are aimed at smaller organizations that lack the resources to protect themselves. According to recent data, almost 50 percent of these businesses have experienced a cyberattack in the last year, and some estimates project a 15 percent increase in cybercrime over the next two years.   

Unfortunately, only a small percentage of organizations are prepared to face such an attack, and those who aren’t prepared can spend upwards of $700,000 (or more) to resolve cybersecurity incidents. Additionally, according to research from IBM, the average cyberattack can take nearly 300 days to contain! 

Significant cyber incidents can leave a long-lasting mark on your organization and your cyber insurance eligibility. So, when business owners learn about the financial impact, headaches, and timeframe associated with identifying and remediating a cyberattack, they usually shift their focus directly to their security posture. 

Cyber insurance will transfer the remaining cyber risk to another party and ensure that you’re well-protected. Since risk transfer is such a vital piece to the puzzle, we want to help support you throughout the process and provide the resources you need to get the best coverage and rates possible.

Here are 5 tips to help you on your cyber security journey: 

Prepare for external vulnerability scanning 
Demonstrate superior security posture 
Foster a security culture with employee awareness training 
Maintain a clean claims history 
Work with a managed service provider who is experienced in cyber insurance

Clients illustrating strong security posture have been able to extend their posture into insurance benefits. One major carrier came out with a study showing a 50 percent reduction in cyber insurance claims with Managed Detection and Response (MDR) in place, while others have indicated seeing up to 25 percent savings on insurance premiums. 

Implementing robust cybersecurity measures such as encryption, regular security audits, employee training, and intrusion detection systems can significantly reduce the risk of cyber incidents. In fact, when going to market after implementing an elite risk profile, numerous customers have seen up to 25 percent lower premiums.

Additionally, organizations with a strong security posture are seeing three to five times higher aggregate limits, including 2.5 times higher sub-limits on social engineering fraud insurance. Finally, select carriers may be willing to help offset the cost of qualifying security services like awareness training, vulnerability management, and 24/7 security monitoring services.

Having an up-to-date security assessment of your environment is essential to ensuring your company is protected against threats. Contact GFI Digital today for a comprehensive evaluation of your security posture. 

Andrew Gilstrap
Vice President

Andrew graduated from the University of Missouri, Columbia with a Bachelor’s degree in Finance. Prior to joining the GFI Digital team, Andrew was Director of Operations for Sangita Capital Partners. Andrew came to GFI Digital in the summer of 2016 with over eight years of sales and management experience. He spent three years as a sales manager in St. Louis, 5 years as Managing Director in Kansas City, and and now serves as Vice President.