Just like a seatbelt in a car, cyber insurance can provide valuable protection against cyber attacks. However, relying solely on it is similar to relying exclusively on your seat belt to keep you safe in a car accident. It creates a "morale hazard" phenomenon where companies may unintentionally take on unnecessary risks, believing they are protected by insurance. This can lead to a lack of investment in security measures to prevent a cyber attack, leaving the company vulnerable to attacks that the insurance policy may not cover. It is important to remember that cyber insurance, like a seat belt, is an essential safety feature, but it's not the only one.
Don't just rely on your cyber insurance policy as your only protection, make sure to review it, understand it and use it in conjunction with other security measures.
Companies need to have proper security measures in place, just like having a car with functioning brakes, airbags, traction control, backup cameras, and a solid frame. Without these vital features, the seat belt can only do so much. And just like a car seat belt, cyber insurance policies may have limitations that can leave companies exposed to significant losses. So, don't just rely on your cyber insurance policy as your only protection, make sure to review it, understand it and use it in conjunction with other security measures. With that being said, let's explore how companies can adopt a CYBERSAFE approach to minimize morale hazards and protect themselves from cyber threats. To begin, remember the acronym CYBERSAFE as a guide for implementing a comprehensive cybersecurity strategy.
C - Cybersecurity Measures
- Implementing firewalls
- Using antivirus software
- Using intrusion detection systems
- Using multi-factor authentication for login access
- Implementing software version management
- Monitoring network activity
Y - Yearly Risk Assessment, if not more often
- Identifying vulnerabilities
- Identifying potential attack vectors
- Identifying critical assets
- Engaging third-party cybersecurity firms for penetration testing and vulnerability assessments
B - Business Continuity and Disaster Recovery Planning
- Establishing Business Continuity and Disaster Recovery Plans
- Customizing these plans to fit the organization’s unique exposures.
- Estimating losses as a result of operational downtime.
E - Employee Training and Education
- Providing cybersecurity awareness training
- Teaching employees how to identify and prevent cyber threats
- Creating a culture of cyber security ownership for each employee
R - Regular Security Auditing
- Conducting regular security audits
- Conducting tabletop exercises to identify vulnerabilities and to improve upon policy and procedures
S - Security Policy and Procedures
- Establishing and regularly reviewing and updating security policies
- Customize policies and procedures specific to the vulnerabilities identified
A - Adequate Cyber Insurance
- Purchasing cyber insurance
- Utilizing resources of the insurance carrier and broker for coverage analysis and for referrals to third-party experts
F - Frequent Review and Update
- Regularly reviewing and updating security policies and procedures
E - Emergency Incident Response Plan
- Having a well-defined incident response plan in place
- Designating incident response team members
- Regularly testing and updating the incident response plan
- Identifying the third-party experts that will be engaged in the event of an incident.
Companies should not rely solely on cyber insurance to protect themselves from cyber threats. A comprehensive approach, including implementing security measures, employee training, incident response plans, and regular risk assessments, are just a few actions that should be taken to avoid the "morale hazard" phenomenon. Cyber insurance should be used as a complementary measure and companies should thoroughly review and understand their coverage. By taking a multi-faceted approach and regularly reviewing policies and procedures, companies can better protect themselves from cyber threats and avoid morale hazards.
To get started on your CYBERSAFE journey, companies can turn to Elpha Secure. Elpha Secure combines cybersecurity software and cyber insurance coverage to provide a comprehensive security solution.