Why your Business needs Cyber Insurance in 2021

Aug 13, 2021
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It’s becoming more frequent that we read a media report of a large, well-known organization that’s been the target of a cyber breach. Often sensitive data and client information is compromised and held for ransom by digital attackers. While the public usually only hears about the major breaches of data security, smaller incidents are happening in Canada far more regularly.
Insurance companies are now sounding the alarm: Not only is the average ransom demand going up (170% comparing the first half of 2020 to the first half of 2021) but attackers are targeting more small and micro-sized businesses.
Industry experts are predicting that ransomware attacks will be the biggest threat for all organizations. In response insurance companies are hardening the market – increasing premiums and making it more difficult to obtain certain coverages.
Some insurers are questioning organizations about certain data safety measures to determine their insurability.
Things like multi-factor authentication are becoming table stakes for organizations, especially those that are working remotely. The use of a secondary method verifies the user logging on to a computer system to ensure they are an authorized user. This can come in the form of a text code or a push alert to a user’s phone which validates the login attempt.
Insurers are also asking for proof of business continuity and disaster planning. Has the organization put time and effort into a plan in case the worst happens? In the case of cyberattacks, what are the protocols and steps they will take to ensure the business continues to operate?
How does a Cyberattack happen?
Social Engineering
Cybersecurity experts predict that an estimated 98% of cyberattacks use social engineering methods, which involves using fear and uncertainty to manipulate someone to reveal information. The use of ransomware and phishing are among the most common types of cyberattacks your business may face.
A ransomware attack occurs when a user clicks on a malicious link or file that is designed to restrict access to your computer or files.  When you open ransomware, a message may pop up demanding payment in exchange for the removal of this restricted access. This type of cyberattack is used by hackers to trick businesses into handing over large sums of money.
More than 97 % of phishing emails contain ransomware. Phishing is a type of cybercrime using fraudulent communications to trick users into revealing sensitive information, such as passwords or banking information. It can be delivered through emails, text messages, phone calls or even faxes. The COVID-19 pandemic has seen an increase in phishing attacks, where hackers impersonate health professionals claiming to represent well-known organizations like The Canadian Red Cross or World Health Organization.
– Sources: Northbridge InsuranceCanadian Underwriter
How do you guard against being a victim of a Cyberattack?
Even the most cautious and protected organizations can be the victim of cyberattack. Those who are committing these crimes have become more sophisticated and are determined to get through all layers of security to compromise data. These attacks can be devastating and expensive to deal with.
These four considerations from Northbridge Insurance can help you and your organization prepare for a cyberattack:
•Understand what assets, data, and information you have
•Prioritize your risks and the impact of a data breach
•Maintain good security hygiene
•Know what to do when a breach occurs
In addition, Staebler Insurance is here to ensure you and your business are protected. Cyber insurance has become a must-have addition to your standard business coverage. Reach out to a Staebler Broker today and be sure you are safe.
READ MORE: This Globe and Mail article highlights the soaring average price paid to ransomware attackers and why some insurers are hesitant to offer cyber insurance to organizations.
If you have been the victim of a cyber incident, the federal government has a reporting tool here: https://cyber.gc.ca/en/incident-management 
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Staebler Insurance is a general insurance broker specializing in auto insurance, home insurance, small business, and commercial insurance. Staebler brokers proudly serve Kitchener, Waterloo, Cambridge, Guelph, Stratford, Listowel, Fergus, Elora, Wellington County, Perth County, Waterloo Region and southern Ontario. Click here to get started.


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