As cyber threats become more sophisticated, insurance providers are tightening their requirements. Increasingly, security awareness training is no longer just a recommendation—it’s becoming a mandatory component for full insurance coverage. Without it, your business could face gaps in your policy, leaving you exposed when an attack occurs. In this blog, we’ll discuss why security awareness training is not just a nice-to-have but a critical requirement for maintaining effective cyber insurance.
The Importance of Cyber Insurance
Unless you’re running a cash-only Amish food business with no internet connection, you probably need cyber liability insurance. Cyber insurance is a safety net that guards against responsibility and financial loss if a cyber attack against you succeeds. It is not that complex. The more significant question around this subject is whether your company needs to add tens of thousands of dollars to your already substantial cybersecurity expenditures. Many businesses discover that the process of acquiring cyber insurance eventually involves comparing the cost of consequent premiums to the extent of a breach.
When a company invests in cyber insurance, they are essentially buying three things:
- A financial safety cushion to lessen the impact of a security breach;
- Proof of due diligence on behalf of governing bodies – Showing that you’ve carefully followed the rules set by regulatory agencies;
- Peace of mind for the company and the parties involved.
A cyber insurance policy can protect the enterprise against cyber events, including acts of cyberterrorism (depending on the policy), and help with the remediation of security incidents such as:
- Restoring personally identifiable information (PII);
- Ransomware – Cyber extortion;
Marriott Data Breach
A real-world example regarding cyber insurance was months after Marriott suffered one of the largest data breaches in history, disclosing their out-of-pocket expenses from the incident were only $1 million. This amount caught everyone off guard, as 383 million innocent guests’ personable identifiable information (PII), including unencrypted payment card information, had been compromised.
How come? Marriott’s resilient cybersecurity insurance coverage ‘chimed’ in $71 million of the $72 million total cost. However, though the international hotel chain continues to face legal fees, fines, and other expenses, the lesson is apparent: cybersecurity insurance assistance played a significant role in mitigating the financial impact.
Security Awareness Training
The strength of your organization’s complex and sophisticated passwords, multiple firewalls and anti-malware programs can be bypassed by exploiting the human factor and that will always be an issue in keeping your company and yourself safe. Employees are often the ones who are most vulnerable and need the right security awareness training, turning them into experienced observers, always on the lookout. Cybercriminals know that bypassing hardware defenses is difficult, but exploiting a person’s lack of awareness is much easier. This reality makes it crucial to equip your employees with the right tools—specifically, thorough security awareness training that helps them recognize and respond to threats.
A UK Government survey indicated in April 2024 that half of all businesses and 84% of large businesses reported some form of cybersecurity breach or attack in the past 12 months. By far the most common type of breach or attack is phishing (84% of businesses and 83% of charities). Bad news, right?
So, why invest in Security Awareness Training? It is simple: both cyber insurance and Security Awareness Training help reduce costs and liability. It adds another layer of protection, preventing the need to invoke your insurance. Contradictory, I know. But the logic is clear—better training reduces the risk of costly breaches and insurance claims.
As the cyber threat landscape continues to grow, guarding our information systems becomes harder and more challenging as technologies evolve. As absurd as it may seem, we must take into account our brains, instincts, reliance, and confidence when it comes to building our cyber defenses. Attackers know that the weakest link is often the humans and thus that’s where they focus their efforts.
More than 90% of cyberattacks involve social engineering or phishing in one way or another. It shouldn’t come as a surprise that lowering the likelihood of social engineering and phishing attacks lowers the possibility of a breach, and security awareness training is the right tool to minimize this attack vector. It can be beneficial in more than one way:
User training
Simply alerting your users to the risks of phishing is one thing, but if you can see a decrease in the number of clicks on phishing emails if you can establish healthy habits and target the basic part of the brain that governs threat identification and response.
Positive Security culture
Firstly, you must realize that you cannot dictate, control, or command culture. A policy is not culture. Policy is the instruction given to employees. Culture is the way that they actually act. In what ways do you impact culture? Building a security culture where employees are engaged in the defense of the business, are comfortable speaking up when something seems off, and understand the risks takes time, and starts from the top.
Compliance and Governance
Security awareness training has the benefit of promoting compliance, but to do it successfully, compliance shouldn’t be the main focus of the instruction. This strategy might provide subpar work and outcomes, but an increasing number of businesses, authorities, and compliance initiatives are beginning to demand security awareness training, which is already required by several compliance standards, including:
How Hornetsecurity can help
Hornetsecurity is a market leader, and has won awards in 2024, Fortress Cybersecurity Award, and Global Infosec Winners for our Security Awareness Training. Here are some compelling reasons why your company should consider cyber insurance as part of your risk strategy management strategy:
- Financial Protection: Covers costs related to investigating, mitigating, and recovering from a cyber incident.
- Legal Liability: Helps with legal expenses and compensation if your business faces data protection law violations.
- Business Continuity: Provides financial support to maintain stability and cover revenue losses during and after an attack.
- Assistance Services: Includes access to IT experts, crisis PR specialists, and data protection lawyers to help manage the aftermath.
- Data Protection: Covers costs related to the loss or compromise of both physical and electronic data.
Conclusion
After a cyberattack, many companies find that having a solid cyber insurance plan in place is essential to maintaining their reputation, regaining their financial stability, and being able to carry on with business as usual. The purpose of cyber insurance is to serve as a safety net and lessen some of the consequences of an attack. They are not a panacea, but they can be crucial in aiding an organization’s healing. As opposed to concentrating on a cybersecurity insurance plan, you ought to make sure your network is sufficiently secured, and to do so, training your human firewalls is a must.