As Cyber Insurance Costs Rise, Threats Grow More Intense

Last updated Oct 23, 2023  |  Published on Sep 9, 2022
by Todd Taber

As the cost of cyber insurance spikes, cyber attacks against public and private sector businesses are growing more common, leaving government and business leaders searching for a long-term solution.

According to cybersecurity firm NCC Group, costly ransomware attacks increased by 47% compared to June levels. The organization says Industrials, Consumer Cyclicals, and Technology remain three of the most targeted commercial industries.

In recent years, leaders from these sectors as well as State and Local government leaders have relied on cyber insurance to help mitigate the damage of potential cyber breaches and ransomware attacks. Nevertheless, just as cyberattacks grow more common, cyber insurance premiums are spiking.

Cyber Insurance: Are You Sure It’s Enough?

A new report from Fast Company details the roadblocks many cyber insurance holders are facing. Officials from Horry County in South Carolina witnessed their cyber insurance premiums climb from $70,000 last year to roughly $210,000 in 2022. To complicate matters, if government officials could not pass a security audit from their insurer, they wouldn’t be eligible to renew their policy at all.

This situation creates an impasse where many State and Local governments may not be able to receive cyber insurance coverage at all, the article notes.

Insurers say the skyrocketing cost of cyber insurance is due to increased demand from public and private organizations. To combat this, Fast Company notes some insurance companies are lowering caps on coverage or even limiting how many insurance policies they issue.

To mitigate risk, insurance companies are increasingly implementing their own security audits for potential clients. In addition, insurers are also requiring organizations to use multi-factor authentication, up-to-date software and firewall protections, cyber training for employees, and ongoing penetration testing.

Attacks on Government Grow More Frequent

According to Fast Company, there were at least 77 successful attacks on State and Local governments in the United States across 2021, plus nearly 90 other attacks on educational institutions. As of June this year, there have been at least two dozen attacks on governments.

The Center for Strategic & International Studies (CSIS) regularly documents known cyber attacks against governments. In reviewing the list, it’s clear every government agency, no matter its size, scope, or specific geographic location, is a lucrative target for bad actors.

According to data from tech information company Comparitech, cyberattacks cost American governments roughly $18.8 billion in recovery costs and downtime in 2020, an unsustainable figure that could directly impact the lives of every American.

How Governments Can Protect Their Operations

Knowledge Services is proud to serve as the Program Management Office for StateRAMP, a nonprofit organization dedicated to improving the cyber posture of State and Local governments across the United States.

As PMO, Knowledge Services removes the burden of cloud security verification from government members, creating processes to allow agencies, State and Local governments, and cloud service providers to comply with StateRAMP security authorization requirements.

As PMO, Knowledge Services can also deliver customized cybersecurity consulting services to government leaders. We draw from our nearly 30 years of experience serving governments to uniquely understand government leaders’ specific security concerns. We create solutions tailored to their needs, safeguarding their operations today and preparing them for the future.