Cyber Insurance: A Separate Policy Many Businesses Overlook

One of the most common misconceptions we see is that businesses assume their general liability or business insurance policy includes cybersecurity coverage—but in most cases, it does not. Cybersecurity insurance is a separate policy that must be purchased and tailored specifically to your company’s risk profile.

Without a dedicated cyber insurance policy, companies may be completely unprotected from the financial impact of data breaches, ransomware attacks, and system downtime. That’s why we always recommend reviewing your coverage with a cybersecurity insurance expert to ensure you have the right protections in place.

Why Every Business Needs Cybersecurity Insurance

Cybersecurity insurance is a necessity. Consider these key reasons why all businesses should have comprehensive coverage in place:

1. The Cost of Cyberattacks is Skyrocketing

• The average cost of a data breach globally reached $4.45 million in 2023, a 15% increase over three years.
• Ransomware attacks alone are expected to cost businesses $265 billion annually by 2031 (Cybersecurity Ventures).
• Small and mid-sized businesses (SMBs) are often the hardest hit, with 60% of SMBs shutting down within six months of a major cyberattack.

2. Cyber Insurance Covers More Than Just Data Breaches

     A robust policy can cover:

✔ Legal and regulatory costs (fines, penalties, and lawsuits)
✔ Ransomware payments and recovery expenses
✔ Business interruption losses from downtime
✔ Incident response services, including forensic investigations
✔ Public relations and reputation management
✔ Customer notification and credit monitoring

Why Cyber Policies Must Be Reviewed Every Renewal

Too often, businesses only review their cybersecurity insurance policy after they’ve been hacked—when they realize their coverage isn’t enough or doesn’t apply to the specific attack they suffered. This reactive approach can lead to massive financial and operational setbacks.

Instead, businesses must proactively review their policies at every renewal to ensure they remain adequate, cost-effective, and aligned with new risks. Here’s why:

1. Coverage Limits May Be Outdated

• Cyberattack costs have skyrocketed, yet some businesses still have low coverage limits based on outdated assumptions.
• Ensure your policy reflects today’s risk levels and includes sufficient funds for legal fees, PR, and data recovery.

2. Insurers Are Changing Requirements

• Many insurance providers now require stricter cybersecurity measures before offering coverage or payouts.
• MFA (Multi-Factor Authentication), endpoint detection, and employee cybersecurity training may be prerequisites for getting or maintaining a policy.

3. Policy Exclusions Can Shift

• Some policies are limiting coverage for nation-state attacks, social engineering fraud, or new types of malware.
• Review exclusions carefully to ensure you’re covered for evolving threats.

Why Waiting Until an Attack Happens is a Costly Mistake

It’s common for businesses to assume they have “enough” coverage—until they suffer an attack. Here’s why waiting for a cyber incident before reviewing your policy can be a critical mistake:

• Claim Denials: You may discover your policy doesn’t cover the specific type of attack you suffered.
• Inadequate Payouts: If your coverage limits are too low, you may face huge out-of-pocket costs.
• Longer Recovery Time: A poorly structured policy can delay payouts, making it harder to recover.
• Higher Premiums Later: Companies that only revise coverage after an attack may face steeper rate increases than those who regularly update policies.

The Walker Group Can Connect You With Trusted Cyber Insurance Partners

At The Walker Group, we understand that choosing the right cybersecurity insurance policy can be overwhelming. That’s why we work with trusted partners who specialize in cybersecurity insurance and can help our clients find the best coverage for their unique needs.

Whether you’re purchasing your first cyber insurance policy or need a review of your current coverage, we can connect you with industry-leading professionals who will ensure your business is protected from cyber threats.

The Rising Cost of Cyber Insurance & How to Stay Protected

With the increased frequency and cost of cyberattacks, insurance premiums are rising—some businesses are seeing rate hikes of 50-100% at renewal. While this is a challenge, businesses can take steps to secure the best coverage at the best rate:

1. Strengthen Your Cyber Defenses

• Implement strong cybersecurity frameworks (NIST, ISO 27001, or CIS controls).
• Use MFA, endpoint detection, and employee cybersecurity training to minimize risk.
• Develop an incident response plan and regularly test all backups.
• Check out our resources and work with your IT partner and Account Team to be proactive and prepared.

2. Work With a Cyber Insurance Expert

• Not all cyber policies are created equal—work with a broker or cybersecurity advisor to ensure your policy is tailored to your risk profile.
• Consider adding business interruption coverage and cyber extortion coverage for maximum protection.

3. Conduct an Annual Policy Review—Before a Cyberattack Forces You To

• Ensure coverage limits align with your business’s risk exposure.
• Stay up to date with new exclusions and policy changes.
• Adjust coverage to reflect new cyber regulations and compliance requirements in your industry.

Final Thoughts: Cyber Insurance is a Business Imperative

Cyber threats will only continue to grow in scale and sophistication. No business is immune, and no static policy will remain sufficient forever. By regularly reviewing, revising, and strengthening your cyber insurance coverage, along with bolstering your technology infrastructure and security posture, businesses can protect themselves from financial disaster and legal headaches.

Need Guidance on Cyber Insurance? We Can Help.

At The Walker Group, we help businesses navigate the complexities of technology and cyber insurance. If you need help finding a trusted cyber insurance provider or want a referral for a policy review, reach out to us. We’re here to help ensure your business stays secure and well-protected in an ever-changing threat landscape.