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Cyber Liability Insurance Changes Occurring in 2021

Karly Rideout - Monday, August 23, 2021

During 2020, many organizations had to make a quick shift to working remotely. Cyber attackers found opportunity in this change resulting in a rapid increase in cyber-attacks.  As cyber-attacks are occurring more frequently, there is also an increased need for organizations to create risk mitigation plans to protect themselves from experiencing a loss. 

Organizations can expect to see changes related to cyber liability insurance. Many insurers will require their insureds to demonstrate what risk mitigation plans are being used to lessen their vulnerabilities to cyber-attacks. Ullico Casualty Group will be asking policyholders to demonstrate their loss control procedures and includes a brief which offers ways to minimize risk

A new report posted by Euclid Specialty explains the changes which can be expected in 2021. One change organizations can expect to see is the required implementation of multi-factor authentication (MFA). Many carriers will be making the implementation of MFA a condition to purchase or renew cyber liability insurance. Euclid Specialty includes some statistics which explain why insurance carriers will be adding this condition:

“According to the Verizon 2020 Data Breach Investigation Report, 4-in-5 hacking-related breaches use stolen or weak passwords.  Such evidence underscores the immediate need for making multi-factor authentication essential to the cybersecurity strategies of employee benefit plan administrators.”

“According to Microsoft, enabling MFA blocks 99.9% of identity-based attacks.”

The implementation and use of MFA can be expected to become even more common as it is so effective in protecting companies from cyber-attacks. MFA has gained a crucial role in cyber protection and will become a requirement of many cyber liability insurance policies.

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