With the average global cost of a data breach reaching $4.88 million in 2024, cyber liability insurance is now a business imperative. You need to meet insurance standards if you are looking for insurance coverage. Increasing exclusions mean companies are looking to managed detection and response (MDR) for support. Investing in MDR can help you meet insurance carrier expectations and ensure your company gets the payouts it owes.
Common Cyber Liability Insurance Requirements
Cyber liability insurance is designed to cover the financial and legal fallout of a cyber incident. If your business handles sensitive data, you need an insurance policy to reduce your liability. However, coverage is not automatic. Providers often require businesses to meet specific requirements, or they might deny your claim. Requirements vary by policy, but common examples include:
- Multifactor authentication
- Encrypted backups
- Endpoint detection and response capabilities
- Incident response plans
- Regular patching
The requirements of cyber liability insurance and MDR go hand in hand. MDR services give you a granular audit trail of threats and corresponding responses, making audits easier and demonstrating a clear commitment to reducing your liability for the insurance company.
What Is MDR Cybersecurity and Why Does It Matter?
Cyber insurers want to see that you have effective security tools in place, but how can you measure effectiveness? If you are looking to improve your claims approval rate and invest in proactive cybersecurity, you should consider implementing MDR.
MDR is a cybersecurity service that provides 24/7 monitoring, incident response and threat hunting using a combination of human responders and technology. It is a solution that goes beyond suspicious activity alerts. MDR services use advanced analytics and hands-on experts to give you real-time threat response.
MDR solutions typically include continuous cloud, endpoint and network monitoring. They use artificial intelligence to power behavioral analytics, which analyzes patterns to predict potential threats or security gaps. At the same time, human security analysts will investigate and validate threats. If red flags arise, they will provide containment and response support.
This proactive approach assumes breaches will happen eventually. With MDR, the goal is to limit damage and respond faster to breaches instead of relying only on prevention methods. Insurers like this strategy because it shows initiative and a desire to improve security.
Key Benefits of MDR for a Business
MDR’s detection and response approach is an excellent support for businesses. Cyber attacks are increasing in the United States, and they are becoming more creative. As good as your prevention methods may be, there is always a new angle for threat actors to try.
MDR helps you recover faster and tighten those weak points. Investing in MDR solutions gives your company:
- Faster threat detection: Real-time alerts and expert support reduce the time between the breach and the fix. Your business can limit financial, reputational and legal exposure.
- Stronger incident management: MDR offers expert guidance and structured incident management. Your teams can more easily meet breach notification timelines and remain compliant with a clear security framework to use.
- Clear prevention strategies: Many MDR platforms offer reports for attack surface reduction. Reports record outcomes, threat activity and response times. Use these documents to support insurance claims and demonstrate your commitment to security.
How MDR Aligns With Cyber Liability Insurance Requirements
With limited blanket coverage options, your business needs to use solutions like MDR to make meeting insurance requirements easier. MDR’s proactive approach helps organizations meet the core requirements insurers use to evaluate risk.
Addressing Compliance Standards
Organizations must follow specific regulatory frameworks. HIPAA binds all U.S. healthcare operations, such as hospitals and clinics, while PCI-DSS is a requirement for groups managing cardholder data. Noncompliance with relevant regulations can lead to financial and legal liabilities.
MDR solutions are designed to meet your insurance and compliance requirements. They often incorporate regulations or industry best practices such as:
These frameworks are often part of the requirements for cybersecurity coverage. Using a solution that meets these standards keeps you up to date on the latest security protections and processes.
Threat Detection and Response Capabilities
For insurers, it is often not enough to only follow these frameworks. Your business must also use effective tools to stop breaches when they happen.
MDR services elevate your threat detection and response, incorporating behavioral analytics and threat intelligence feeds to create an effective detection net. MDR solutions continuously scan for threats across your networks and environments. Once a threat is detected, human services will analyze the alert. If the threat is valid, they will coordinate a response. Insurers look for MDR solutions because they demonstrate your commitment to managing threats.
Preparing for Insurance Audits
MDR services also prepare you for insurance audits. Insurers will look for proof of cybersecurity processes during the application and renewal process. If you lack documentation or your processes are outdated, you might see higher premiums and coverage denial.
MDR solutions give your organization the reports needed to maintain your insurance standing. Reports will cover:
- Incident resolution summaries
- Threat detection timelines
- Compliance checks
- Response protocols
With MDR reports, you show insurers concrete evidence of your security measures. Insurers will see that you are proactive and structured, mitigating risk perception.
Challenges Small Businesses Face in Cybersecurity
Large companies have extensive resources and staff to manage their threats. Small to medium businesses are working with tighter budgets and teams, and they cannot afford dedicated compliance teams and in-house security operations. However, they are still a target for cyber attackers. In fact, Verizon’s 2023 Data Breach report found that more small businesses were victims of attacks than large organizations.
Limited resources make smaller companies a target for cyber attackers. Building a comprehensive, proactive approach and meeting insurance standards is a major challenge for companies trying to stay afloat.
How MDR Levels the Playing Field
MDR makes security and insurance coverage more accessible. These services offer expert capabilities and resources through a third party, giving your business industry-standard security with scalable pricing structures, 24/7 monitoring and prebuilt tools. Experience expert support and tools that reduce the damage of a cyber attack and help you maintain insurance compliance.
Why Choose Morefield for MDR Services?
Meeting cyber insurance requirements means finding a solution that fits your unique insurance coverage. Morefield delivers scalable cybersecurity solutions designed to help Pennsylvania businesses protect their business and remain compliant.
With over 70 years of experience, we combine deep industry knowledge with integrated technologies so you have access to state-of-the-art security solutions that work with your business needs. Contact our team today to see how we can help you meet your insurance requirements and stay ahead of cyber attackers.