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Preventive Measures: How Enhancing Cybersecurity Can Lower Your Insurance Premiums

Strengthen Your Cyber Defense, Reduce Your Costs

Hackers and online threats are everywhere, making it crucial for businesses to protect their data. Just like people get car insurance to cover accidents, companies take out cyber insurance to help them if an online attack hits them. As these online threats increase, the cost of cyber insurance also increases. This situation is challenging for businesses because they have to spend more money to stay safe.

There’s a bit of good news, though. If businesses make their online security stronger, they can actually pay less for their cyber insurance. Think of it like getting a discount on your car insurance for having good brakes or a safe driving record. When companies show that they’re doing a good job protecting themselves online, the insurance companies see them as less risky and charge them less money. So, by getting better at stopping hackers, businesses can save some money on insurance. It shows that improving online security can help save money on insurance.

Cyber Safety and Your Insurance Premium

When businesses want to protect themselves from online dangers, they buy cyber insurance. This is like a safety net that helps them if they ever get attacked on the Internet. However, how much they must pay for this safety net, or their “premium” can depend on many factors. So, cyber insurance companies decide how much businesses should pay? They look really closely at how safe a business is on the Internet. They ask, “How good is this business at stopping hackers? Do they have strong locks on their digital doors?” This is called assessing the risk. The riskier a business looks, the more they have to pay because there’s a higher chance something terrible might happen online.

A few things can make your insurance cost go up or down. For example, if a business has been hacked before, insurance might cost more because it seems like it might happen again. But if a business has strong security, like good passwords and software that keeps hackers out, it might cost less because it’s like having a really good alarm system in your house. Other things that matter include what kind of business it is (some types are hacked more often), how much sensitive information they have (like credit card numbers), and even how well their employees are taught to avoid online tricks by hackers. 

Understanding this link between how safe a business is online and how much they pay for insurance is really important. It shows that by being safer on the Internet, businesses can protect themselves better and save money.

How Security Lowers Insurance Costs

When businesses want to pay less for their cyber insurance, they can take steps to make themselves safer online. Businesses must regularly check their online systems to find any weak spots hackers could use to get in. This process is known as risk assessment. Once they find these weak spots, they fix them, making it harder for hackers to break in. To keep their online information safe, businesses use tools like firewalls, which act as barriers to stop hackers, and encryption, which makes data readable only to people with the right key. 

It’s also important for every employee to know how to stay safe online. This means learning not to click on suspicious links and using strong passwords. Even with good security, things can sometimes go wrong. So, businesses have plans for what to do if they get hacked. This includes how to get their systems working again and tell people about the problem. Businesses can show insurance companies they’re serious about staying safe online by doing these things. This can help them get better rates on their insurance, saving them money. It’s a win-win because they’re safer and pay less. Getting a better deal on cyber insurance is a bit like trying to get a better allowance from your parents. You must show you’re responsible and know what you’re talking about. Here’s how businesses can speak to insurance companies to try and get a lower price on their cyber insurance:

1. Show Off Your Safety Measures: Like you’d show your parents your clean room to prove you’re responsible, businesses must show insurance companies all the cool things they’re doing to stay safe online. This means telling them about the strong passwords they use, the fences they have around their online information (firewalls), and their secret codes that keep messages safe (encryption).

2. Prove You Keep Getting Better: Businesses must also show they’re always working to be even safer. It’s like showing your report card to prove you’re improving at math. They can tell insurance companies how they keep checking for any weak spots and teach their employees to be super careful online.

3. Ask Smart Questions: Just like you might ask for more allowance for doing extra chores, businesses can ask insurance companies if they give discounts for being extra safe online. They can ask questions like, “If we add this new security program, will it lower our costs?” or “Do you give a discount for training all our employees to spot hackers?”

By doing these things, businesses can show they’re a good risk, which means they’re less likely to need the insurance money. This can help them get a better deal like you might get a bigger allowance for doing more around the house.

Securing Your Business and Your Wallet

If you’re running a business, look at how you’re keeping things safe online. Could you be doing more? Making some changes might help you save money on your insurance. If you need help figuring out where to start or what to do, Valiant Technology is here. We can check out how safe your business is online and give you tips on making it even safer. Plus, we can help you figure out how to talk to insurance companies for a better deal. So, why not give us a call or send us a message? Let’s work together to keep your business safe online and save you some money on insurance.