In the face of rising cyberthreats, more and more RIAs are looking at cybersecurity insurance to protect them in the event of an attack. The insurance can be costly, however employing advanced security practices and training your employees can help bring that cost down.
What cybersecurity insurance providers look for
Cybersecurity insurance providers look at your RIA’s readiness to face cyberthreats as their basis for your premiums. The insurer will want to understand the nature of your business and the kinds of data you process and manage. They will especially want to understand the personal and financial information you manage for your clients and staff.
They will also ask you about your IT security planning and history, so you should expect questions like:
- What was your approximate IT security expenditure in the last year?
- Do you manage your IT infrastructure in house or do you outsource it?
- How many full-time IT security employees do you have?
- How many employees have a dedicated IT security role?
- What is your organization’s data retention policy?
Also, they will likely ask you if your RIA firm is currently using any of the following cybersecurity tools:
- Information and network security controls such as data encryption tools, multifactor authentication, firewalls, and the like
- Ransomware controls such as email screeners, remote access tools, next generation antivirus (NGAV), endpoint detection and response (EDR), and backup solutions
- Phishing controls such as social engineering training, wire transfer security protocols, and vendor/supplier verification protocols
This assessment will paint a picture of your RIA’s overall security posture, which will then tell the cybersecurity insurance provider how much risk there is in insuring your firm.
It’s important to note that some cybersecurity tools aren’t optional; cybersecurity insurance providers will recommend specific tools to your RIA before they can provide you with cybersecurity insurance. Some examples are next generation antivirus and endpoint detection and response tools that have centralized monitoring and enterprise-level activity logging features, and advanced email screening tools and practices.
Lastly, you can expect any cybersecurity insurance provider to ask about your employee security training profile. Employees aren’t simply another line of defense when it comes to data security; they are integral to the success of any security strategy you seek to deploy. Here are some questions you should be prepared to answer:
- Do any of your employees have IT security certifications?
- What network security concepts do your employee onboarding and training cover?
- Are all employees familiar with enough social engineering and phishing concepts to protect your business data?
How advanced security and employee training slash insurance costs
Implementing advanced cybersecurity practices and tools lowers your risk for data loss and system damages in case of an attack. This, in turn, reduces your insurance premiums, as your organization is seen as being less prone to facing sudden liabilities. Therefore, improving your cybersecurity posture will bring in tangible benefits on multiple fronts.
Also, providing ample training to your RIAs will help ensure that your security plan is given the best chance to succeed. In the eyes of a cybersecurity insurance provider, well-trained employees further reduce a company’s risk of data loss.
Any insurance company will be more likely to extend their widest coverage to clients that exhibit these good business practices. So if you can show prospective insurance providers that you are taking proactive steps to limit your cyberthreat exposure, they will be more likely to offer lower premiums, provide better coverage, and even issue perks such as discounts or freebies from their partners.
Partner with a trusted tech provider that specializes in RIAs
A great way to improve your overall cybersecurity posture is to partner with a cybersecurity specialist. And it’s a plus if you can find one that is equipped and experienced with your industry’s specific requirements. In the RIA industry, it’s critical to work with an IT provider that has deep experience working with RIAs, as non-RIA providers will likely just deploy a one-size-fits-all approach that is insufficient to your needs. Worse, these basic cybersecurity providers can even hurt your RIA’s compliance posture.
Protect your RIA from cyberthreats and lower your cybersecurity insurance in one fell swoop. Partner with RIA Workspace and enjoy the full host of benefits of working with an IT provider that specializes in RIAs. Contact us to learn more about our services.