There's been a worldwide increase in cyberattacks —both in number of occurrences and complexity. Organizations are increasing their security budgets to be able to implement the latest cybersecurity solutions and improve their defenses against potential cyber threats. However, even with all the tactical defenses in place, they also need to be prepared with a solid response and recovery strategy.
Today, cyber insurance has become a necessity for organizations of all sizes. With no organization being immune to the dangers of cyberattacks, what concerns a lot of security professionals are the heavy financial losses such attacks bring. Despite having their best defensive systems in place, organizations can still become liable to pay millions of dollars in compensation to stakeholders like customers, third-party associations, or government regulators in the aftermath of a cyber attack. As a part of their recovery plan, IT security leaders across industries are choosing to invest in cyber risk coverage options like cyber insurance, which can help cover some part of these financial losses and prevent their organizations from going insolvent.
Like any other organization, government agencies are equally—if not more—at risk of cyberattacks. In 2021, the government and military sector witnessed a 47% increase in cyberattacks from 2020 and experienced the second highest volume among industries at 1,136 attacks per week. With such a targeted increase in cyberattacks towards the government sector, it is becoming a challenge for government agencies to get cyber insured. This difficulty mainly comes from two perspectives: cost and coverage.
Ever since the pandemic, the cost of cyber insurance has been on the rise. The 2021 National Survey of Local Government Cybersecurity and Cloud Initiatives states that 69% of local governments reported an increase in their cyber insurance premium since their previous renewal. With rising premiums, it could soon become unaffordable for governments with limited security budgets to be cyber insured. Additionally, the changes in the cyber insurance market have led to policy changes and reduced coverage for the insured. The increase in cyberattacks has forced cyber insurance companies to deal with a larger number of expensive payouts. To offset this cost and protect themselves from bankruptcy, cyber insurance companies are reducing their level of coverage. Such reduced payouts can negatively affect the government agencies' disaster recovery and business continuity plans post cyberattacks.
With higher premiums and lesser risk coverage, government agencies are finding it hard to find suitable cyber insurance providers. The constant vulnerability to cyber threats has made this an urgent matter of concern.
To overcome the challenges brought about by changes in the cyber insurance market and to get cyber insured, government agencies must make some improvements to their cybersecurity posture. Leading cyber insurance providers are investigating their potential client's security measures and controls before offering a policy. This involves an understanding of how exposed they are to threats and vulnerabilities, as the cyber risk of each client is essentially transferred to the cyber insurance provider. Therefore, cyber insurance providers are willing to provide higher coverage only for organizations that have the security measures and controls in place to be well-fortified against cyberattacks.
To become insurance ready, every organization, including government agencies, must adopt a holistic view of cybersecurity. They might invest millions in technology, but their people and processes are equally important components when it comes to creating a cyber secure organization.
The human element is defined by the cyber awareness of the organization's people. This includes employees and stakeholders like customers, third-party associations, and so on. To ensure everyone in an organization is cyber aware, organizations must strategically conduct cyber awareness programs and training on the basic, yet crucial, security practices. Through this, individuals will be well-informed about what they can do to practice good cyber hygiene and improve the organization's overall cybersecurity posture.
Another crucial component in cybersecurity is defining a process. To create and foster cybersecurity as a part of the organization's culture, it is essential to track the progress of all cybersecurity measures on a periodic basis, and strategize future investments accordingly. Organizations must also partake in cyber risk assessments to identify how exposed they are to potential risks. This will help them evaluate their current practices and identify any necessary changes. Additionally, organization-wide mandated processes like role-based access control policy, least privilege access policy, and multi-level approval workflows, help implement the defined cybersecurity strategies while also enabling organizations to stay compliant with the evolving privacy laws.
Deploying these cybersecurity measures through people, processes, and technology can strengthen the cybersecurity defense of government agencies and help them get cyber insured at a reduced premium cost.
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