To put it mildly, the current cyber liability marketplace is like a kite in a windstorm. If you are a first-time shopper or a current cyber liability policyholder be prepared for some major changes. Some of those changes will be higher premiums, higher deductibles, limit reductions, certain coverages reduced or removed, and more policy exclusion. Policy renewal customers should expect renewal premiums to increase anywhere from 40% to 100%+.
The cyber market is in a dynamic state of flux. Claims are on the rise and the biggest drivers for the market upheaval are ransomware attacks and the fact many and possibly most new shoppers and current insureds do not have Multi-Factor Authentication (MFA) implemented for all remote access to their networks, privileged accounts or VPNs (Virtual Private Networks).
The result is new shoppers and current insureds that do not have MFA implemented and functioning will not find any quality carriers that will offer coverage or renewal terms. In fact, virtually all carriers require a signed affirmation affidavit attesting to the fact that MFA is fully implemented and functioning prior to the effective date of a new policy or renewal policy. For renewal customers, some carriers may grant a 30-day extension for their insured to get MFA implemented and functioning, but if it is not at the end of the extension period the carriers will issue a notice of non-renewal.
So, what is MFA? It is a method of authentication to prove you are who you say you are. It requires a user to present two or more specific credentials to gain access to the network or an account. It also goes beyond just furnishing a username and a password and may also require specific answers to questions that only the user knows. If all is acceptable the user has access to the network or the account in question. If not, the user is prevented from accessing either.
MFA is so effective it can virtually reduce the probability of a cyber-attack by over 95%, however, MFA is not a panacea. The backstop to having MFA implemented is also a stand-alone cyber liability policy tailored to a customer’s specific exposures and industry to cover the costs associated with a ransomware attack or other types of network security breaches.
Also, to provide an idea of how successful ransomware attacks are, in 2019 worldwide profits to cybercriminals exceeded $1.4 trillion dollars. Additionally, according to Coveware in their Q3 2021 report they stated:
- The average ransomware payment was $139,739 in Q3 2021
- 83% of ransomware attacks threatened to leak exfiltrated data
- Ransomware attacks resulted in 22 days of downtime
- Top industries targeted:
- Professional Services: 24%
- Public Sector: 15%
- Healthcare: 13%
- Company size of ransomware targets
- 11-100 employees: 35%
- 101-1,000 employees: 44%
In summary, MFA should be implemented across the board for all remote access to a network or accounts by employees, vendors and independent contractors; for remote access to emails; access to cloud providers; system back-ups; and privileged user accounts just to list a few.