Cyber Insurance Costs Are Rising, and Many Businesses Are Being Declined

In today’s rapidly evolving digital landscape, Australian businesses are increasingly dependent on their online presence and IT infrastructure. As cyber threats grow in sophistication, so too do the measures needed to protect against them. However, many businesses are now facing a new challenge – skyrocketing cyber insurance premiums or even denial of coverage. The reason? They aren’t meeting the minimum standards required by insurance providers.

Why Is Cyber Insurance Getting More Expensive?

Cyber insurance providers are feeling the pressure as the frequency and severity of cyberattacks increase, especially targeting small to medium businesses. With breaches costing Australian businesses millions in damages, insurers are re-evaluating how they price policies and who they are willing to cover.

The costs are soaring because many businesses fail to follow recommended cybersecurity protocols. This failure not only makes them a higher risk but also increases the likelihood of claims, which drives premiums up for everyone. As insurers focus more on minimising risks, they are becoming stricter about which businesses they insure.

Denied Coverage for Not Meeting Minimum Standards

For businesses that don’t comply with key cybersecurity requirements, the reality is even starker – insurance applications are increasingly being denied. If your business doesn’t implement certain basic cybersecurity measures, you may find yourself unable to obtain coverage.

The common minimum standards insurers are requiring include:

• Multi-Factor Authentication (MFA) on all accounts, including email and VPNs
• Password Managers to ensure secure, complex password use
• Cybersecurity Awareness Training for all staff members
• Regular Audits to identify and fix vulnerabilities
• Advanced Antivirus Solutions beyond basic virus protection
• Firewalls to safeguard servers and internal networks

Without these basic protections in place, your business is seen as a significant liability. Cyber insurance providers are unlikely to offer coverage – or they’ll charge prohibitively high premiums if they perceive your company as unprepared for modern cyber threats.

SMB1001: A New Standard for Australian Small Businesses

As insurance providers tighten their requirements, Australian businesses are looking for ways to meet these standards more easily. For smaller businesses, adopting the government’s Essential Eight cybersecurity framework can feel overwhelming, with its complexity and significant cost implications. Fortunately, the new SMB1001 standard is gaining traction as a more practical alternative. SMB1001 is tailored specifically for small businesses, offering a streamlined approach to cybersecurity that aligns with the realities of running a smaller operation. It focuses on critical security controls that are easier to implement and certify against, making it an attractive option for businesses seeking to improve their cybersecurity posture and meet insurance requirements.

What Can Your Business Do?

With cyber insurance premiums climbing and coverage being denied for not meeting minimum security standards, Australian businesses need to act now. Consider the following steps:

• Adopt Cybersecurity Best Practices: Implement MFA, use password managers, and provide regular user awareness training to your staff. 
• Stay Ahead of the Curve: Conduct regular audits and update your antivirus and firewall protection.
• Certify Against SMB1001: If you’re a small business, the SMB1001 standard is a straightforward way to enhance your security posture and ensure you meet insurance requirements.
• Work with IT Experts: Collaborating with an IT service provider like TechPath can help you align your cybersecurity efforts with your business goals and insurance needs.

By taking proactive measures, you’ll not only reduce your risk of a cyberattack but also secure more affordable and comprehensive insurance coverage – critical in today’s digital age.

Is your business ready for the future of cyber insurance? Talk to the TechPath experts about strengthening your IT security and safeguarding your business.