Boost Your Insurability: The Importance of Having an Incident Response Plan

With cybercrime on the rise and the likelihood of breaches increasing, organizations must adopt a proactive cybersecurity approach. In this era of ransomware-as-a-service and business email compromise, it’s not a question of if a breach will occur but when. That’s why having an incident response plan and cyber insurance is crucial.

These two essential tools work hand in hand, offering the difference between averting a crisis and enduring a costly attack. While obtaining and maintaining cyber insurance has become more complex, with varying coverage, evolving control requirements, and inadequate plans being chosen, a robust incident response plan plays a vital role. It not only helps organizations respond effectively to breaches but also streamlines the cyber insurance process.

Understanding Cyber Insurance: Coverage and Evolving Landscape

Cyber insurance serves as a protective policy that organizations obtain to safeguard against cyber breaches. It provides coverage for specific liabilities and a portion of the associated breach-related expenses. As a relatively new form of insurance, cyber insurance continues to develop and adapt.

In recent years, we have witnessed updates in application requirements, fluctuating premiums, and improved clarity regarding the various levels of coverage offered. While cyber insurance is increasingly recognized as a crucial component of risk management, a recent report reveals that 48% of organizations anticipate their insurance to cover 80-100% of data breach costs. This reliance on insurance highlights the need for a balanced approach that includes comprehensive security measures alongside cyber insurance coverage.

Understanding Incident Response: Safeguarding Organizations Against Cyber Attacks

Incident response involves a series of procedures and resources employed to detect, limit the impact of, and resolve cyber attacks, aiming to reinstate normal operations within an organization.

To effectively address incidents, organizations develop and execute an incident response plan, which outlines the strategies and measures to be taken before, during, and after an incident occurs. Integration of cyber insurance within the incident response plan is crucial. Often, incident response services are outsourced to third-party providers, utilizing solutions, retainers, or a combination thereof.

The Role of Security Controls in Cyber Insurance

Implementing specific security controls is a prerequisite for organizations seeking to obtain cyber insurance. These controls serve a purpose beyond mere compliance, as they play a crucial role in preventing incidents and facilitating effective response in case of a breach or potential threat.

Outlined below are common security controls that are typically required or requested to secure favorable terms in cyber insurance:

1. Vulnerability Scanning: Regular vulnerability scanning, preferably conducted continuously, is crucial for identifying and mitigating risks arising from vulnerabilities. Proper patching can prevent numerous breaches, making vulnerability scanning an essential practice.
2. 24×7 Monitoring: Continuous monitoring is essential because cyber attacks often occur during periods when offices are less staffed. Maintaining round-the-clock monitoring allows for timely threat detection, enabling the implementation of incident response plans or other necessary measures to mitigate risks.
3. Endpoint Detection: Endpoints can present challenges for IT teams, as their definition can vary. However, employing endpoint detection tools that record activity and trigger alerts can significantly improve threat response capabilities when incidents occur.
4. Employee Security Training: Social engineering attacks, including phishing, are prevalent and highly successful. Educating employees through security awareness training helps them defend against these types of attacks, thereby reducing the risk of credential theft and other breaches.
5. Phishing Simulations: Conducting simulated phishing exercises exposes users to realistic threat actor tactics, enhancing their ability to recognize and respond to such attacks in a safe environment.
6. Log Retention: Regular log retention practices are integral to incident response planning. Logs serve as valuable resources for investigating breaches, understanding the attack chain, determining the extent of damage or loss, and enabling real-time threat response by security or triage teams.
7. Email Protections: Given the alarming rise of Business Email Compromise (BEC) attacks, securing organizational email accounts is crucial. Unauthorized access to email accounts can lead to fraud, privilege escalation, and further theft of credentials and data.
8. Identity and Access Management: Effectively managing user identities and access privileges helps restrict unauthorized movement and detect suspicious activities, such as unusual login attempts or Multi-Factor Authentication (MFA) fatigue attacks.
9. Asset Inventory: Maintaining an accurate inventory of the assets within your security environment is the first step in both protecting and monitoring access and activities. Without this knowledge, tracking threat actors within the environment or implementing appropriate incident response measures becomes challenging.

By implementing these security controls, organizations not only improve their overall security posture but also demonstrate their commitment to risk mitigation, leading to more favorable terms when obtaining cyber insurance.

Developing an Effective Incident Response Plan: A Crucial Step

Managing and addressing the nine crucial items mentioned above becomes paramount when implementing an incident response plan. However, an incident response plan should extend beyond a static list of items on paper. It needs to be a dynamic and adaptable document that can be tested and adjusted in response to evolving security and business requirements. Key components of an incident response plan include:

1. Formulating an Early Incident Response Strategy: Defining a strategic approach for addressing the initial stages of an incident helps ensure a swift and effective response.
2. Identifying Stakeholders and Roles: Clearly identifying the stakeholders involved in incident response and assigning specific roles and responsibilities helps establish a coordinated and efficient response effort.
3. Appointing a Response Team: Assembling a dedicated incident response team with the necessary expertise and authority enables a structured and coordinated response to incidents.
4. Conducting Tabletop Exercises: Regularly conducting tabletop exercises or simulated scenarios allows organizations to test and refine their incident response strategy, ensuring its effectiveness in real-world situations.
5. Testing Backup and Recovery Systems: Thoroughly testing backup and recovery systems helps validate their reliability and effectiveness in restoring critical systems and data following an incident.
6. Implementing Readiness Technologies: Utilizing readiness technologies, such as the security controls mentioned earlier, strengthens an organization’s overall preparedness to detect, mitigate, and respond to potential threats.

An incident response plan not only reduces the risk of a major incident but, according to the IBM Cost of a Data Breach Report 2022, it can also significantly decrease incident response costs by up to 45%.

The Synergy Between Incident Response and Cyber Insurance

Incident response planning and cyber insurance complement each other when organizations aim to mitigate risk throughout the entire breach lifecycle.

Having an effective incident response plan in place can help prevent a minor threat from escalating into a major incident. Concurrently, cyber insurance provides a means to transfer a portion of the risk to an insurer, facilitating faster recovery from both business and financial perspectives. Furthermore, the robust security controls required for cyber insurance and incident response planning contribute to preventing incidents in the first place. Relying on just one aspect is insufficient; organizations must integrate incident response and cyber insurance as complementary measures to effectively manage risk before, during, and after a breach.