April 24, 2023

How You Can Save Money on Cyber Insurance by Outsourcing IT

As a result of numerous cyber attacks on businesses and organizations, cyber insurance rates have skyrocketed. Recent reports show that the number of claims filed in 2020-2022 has increased significantly. As a CPA firm, you may wonder how to protect your business from cyber risks without breaking the bank. One solution to this problem is outsourcing your IT security to a reliable IT security provider.

What is Cybersecurity Insurance?

Cybersecurity insurance is designed to protect businesses from cyberattacks and related risks. CPA firms can benefit from both first-party and third-party coverage provided by cybersecurity insurance.

  • First-party coverage protects a firm's data, including employee and customer information, and can include legal counsel, data recovery and replacement, lost income, and forensic help.
  • Third-party coverage protects a firm against claims from third parties resulting from a breach and covers expenses related to litigation, client payments, and shares.
  • Cybersecurity insurance providers offer different types of coverage to protect against various cyberattacks. These attacks can be costly and lead to revenue harm, legal issues, equipment damage, and client loss. Cybersecurity insurance helps alleviate the direct costs related to security breaches.

Understanding the benefits of cybersecurity insurance and what it includes is crucial in determining the best way to protect your CPA firm in case of a cyberattack.

Benefits of Outsourcing IT Security to a Reliable Provider

Some of the benefits of outsourcing your firm's IT security include:
  • Reduced Risk of Cyber Attacks: You are taking proactive measures to reduce the risk of cyberattacks on your business by outsourcing your IT security to a reputable provider. It is because IT security providers are well-equipped to handle various types of cyber threats and have the most up-to-date technologies and tools to protect your systems from cyberattacks. Reduce the likelihood of filing a claim on your cyber insurance policy by lowering the risk of cyberattacks, which can result in lower premiums.
  • Expertise in IT Security: Outsourcing to an IT security provider means working with a team of experts in IT security. These professionals have years of experience in handling different types of cyber threats. They have the knowledge and skills to detect potential vulnerabilities in your systems and fix them before cybercriminals can exploit them. This level of expertise can help you prevent cyberattacks and, as previously stated, can help you reduce the number of claims you file on your cyber insurance policy.
  • Improved Compliance: IT security providers can also help you improve your compliance with various regulations such as HIPAA, PCI-DSS, and GDPR. Compliance is essential in cyber insurance because most policies require compliance with specific rules to be eligible for coverage. By outsourcing your IT security, you'll be able to ensure that you're meeting the necessary compliance requirements, which can translate to lower insurance premiums.
  • Faster Response Time: Response time is critical in the event of a cyber attack. IT security providers are well-equipped to handle cyber incidents. The quicker you respond, the less harm to your systems and data. This quick response time can help you minimize the damage caused by a cyber incident and reduce the likelihood of filing a claim on your cyber insurance policy.

What Types of Risks are Covered by Cybersecurity Insurance Policies?

CPA firms face a range of privacy and exposure risks due to frequent and expensive cyberattacks. However, having a solid cybersecurity insurance policy can help mitigate these risks. Such approaches can offer protection against privacy liability, system failures, cyber extortion, business interruption, fraud, reputational harm, and data breaches, which can compromise the personal information of clients and employees. 

In addition, some cybersecurity insurance policies may cover the cost of providing credit monitoring services to affected clients. Another risk exposure that covers cybersecurity insurance is ransomware attacks or denial-of-service attacks, which can cause significant financial losses. It's crucial for C-suite executives to carefully review the policies offered by cybersecurity insurance companies, as these policies can vary significantly.

How Much Does Cybersecurity Insurance Cost?

The cost of cybersecurity insurance is determined by several factors, including the type and size of the company, its location, existing security measures, and the level of coverage and deductible.

A nationwide study found that cybersecurity insurance premiums ranged from $650 to $2,357 annually, based on moderate-risk companies with a million-dollar liability limit and a $10,000 deductible. Insurers consider the nature of the business, the number of sensitive records stored, and whether credit card or banking information is stored when determining the cost of cybersecurity insurance. 

The location of the business also impacts the cost of insurance. The average monthly premium for cybersecurity insurance is increasing due to ransomware attacks and data breaches. Existing security measures are reviewed during the application process, and insurers may question applicants on their cybersecurity protocol. 

Strong cybersecurity measures are crucial to protecting CPA firms from cybersecurity threats. Specialized IT service providers can offer effective cybersecurity solutions and strategies to help protect against potential threats.

Mitigate Cyber Risks with Robust Cybersecurity Insurance Coverage

Outsourcing your IT security to a reliable provider can help you save money on cyber insurance. Outsourcing your IT security is an excellent solution to protect your business from cyber risks without breaking the bank. By reducing the risk of cyberattacks, improving compliance, and responding quickly to cyber incidents, you can minimize the likelihood of filing a claim on your cyber insurance policy, which can translate to lower insurance premiums.

Cetrom is an IT cloud-based security system provider focusing entirely on providing cybersecurity solutions for CPA firms. With a multi-level approach to cybersecurity, Cetrom helps prevent, detect, and combat even the most challenging cybersecurity threats. Its state-of-the-art security technologies can help prepare CPA firms to qualify for vigorous cybersecurity insurance coverage.

 

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