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Preparing for Cyber Insurance Audits with Compliance Scanners

ConnectSecure  |   Apr 15, 2024

As cyber threats continue to rise, so does the importance of cyber insurance for businesses looking to protect themselves from potentially crippling financial losses. Companies in the process of acquiring insurance often turn to their Managed Service Provider (MSP) for help. In such instances, MSPs with a strong vulnerability management and compliance offering are well positioned to capitalize on this growing demand.

(Reading tip: What Role Does Vulnerability Management Play in Cyber Insurance?)

You, as an MSP, can play a central role in getting your clients ready for cyber insurance audits, which matter to the extent of coverage and premium costs. A key tool for MSPs in this preparation process is the compliance scanner. This tool not only simplifies the audit preparations but also ensures that a business’s systems meet the required standards for cyber insurance.

Understanding Cyber Insurance Audits

Cyber insurance audits assess a company’s cybersecurity posture to determine the risk insurers will accept. These audits evaluate the safeguards a company has in place and its vulnerability to attacks.

Strong alignment with a recognized regulatory framework signals better risk management. Depending on the industries they serve, cyber insurance companies may rely on different frameworks to evaluate an organization  (some may also have their own internal risk assessment models). The results influence insurance terms, including coverage limits and premium costs, making these audits crucial for businesses seeking cyber insurance.

Generally, the cyber insurance industry evaluates applicants based on the following frameworks:

Highly Relied-On Frameworks

  • NIST Cybersecurity Framework (CSF): The NIST CSF offers guidelines for identifying, protecting, detecting, responding to, and recovering from cyber threats. Its popularity with insurers stems from its comprehensive nature and risk-based approach.
  • ISO 27001/27002: These international standards provide a model for establishing and operating an Information Security Management System (ISMS). Achieving ISO 27001 certification demonstrates strong cybersecurity practices, making it attractive to cyber insurers.
  • PCI DSS: The Payment Card Industry Data Security Standard is mandatory for any organization handling credit card data. Cyber insurers will often specifically look for PCI DSS compliance if an organization processes or stores payment information.

Other Frameworks Frequently Used

  • CIS Controls: A prioritized set of actions to protect against common cyber attacks. These are highly practical and are often seen favorably by insurers.
  • NIST 800-171: Required for organizations working with Controlled Unclassified Information (CUI) within the US Department of Defense supply chain.
  • HIPAA: The Health Insurance Portability and Accountability Act mandates the privacy and security of protected health information. Cyber insurers will expect adherence from healthcare providers and related entities.
  • State-Specific Regulations: Many states, like New York with its NYDFS Cybersecurity Regulation, have their own rules for data security and breach notification within certain industries.

The Critical Role of Compliance Scanners

Compliance scanners are key tools of your compliance management strategy and enable you to verify your clients' adherence to established cybersecurity standards and regulations. These tools are essential for preparing businesses for cyber insurance audits for several reasons:

Baseline Security Assessment:

Compliance scanners provide a detailed snapshot of an organization’s current security stance by identifying vulnerabilities and evaluating risk severity. This information forms the basis for all subsequent security enhancement efforts, setting a clear benchmark for improvement.

Continuous Monitoring and Updates:

Regular scanning ensures that new vulnerabilities are promptly identified and addressed. This ongoing vigilance is often a prerequisite for cyber insurance coverage, proving to insurers that the client maintains high security standards.

Documented Proof of Compliance:

Detailed reports from compliance scanners serve as evidence of a company's cybersecurity measures. These documents are invaluable during audits, demonstrating the organization’s commitment to security and its alignment with best practices.

Prioritized Remediation Strategies:

Beyond identifying vulnerabilities, compliance scanners provide actionable recommendations for addressing them. Prioritizing these suggestions based on threat severity ensures that the most critical vulnerabilities are remediated first, thus enhancing the overall security posture.

Enhanced Client Communication:

The insights gained from compliance scans facilitate transparent communication with clients about their security vulnerabilities and the steps needed to mitigate them. This transparency is crucial for building trust and reinforcing the importance of comprehensive cybersecurity measures.

Steps to Prepare for Cyber Insurance Audits

Effective preparation for cyber insurance audits involves several strategic steps:

  • Initial Comprehensive Scan: Conduct a thorough scan using the compliance scanner to establish a security baseline. This initial scan should be performed well in advance of the audit to allow sufficient time for addressing any vulnerabilities.
  • Implement Remediation Measures: Based on the scanner’s recommendations, address the identified vulnerabilities. This step may involve patching software, updating systems, and enhancing network security measures.
  • Regular Follow-Up Scans: Schedule regular scans to monitor the status of remediation efforts and to catch any new vulnerabilities that may arise. Continuous monitoring underscores a proactive security posture to insurers.
  • Documentation and Reporting: Collect and organize all reports and documentation generated by the compliance scanner. These documents should clearly illustrate the security measures implemented and the improvements made, serving as a robust foundation for the audit.
  • Mock Audit Trials: If possible, conduct mock audits to simulate the actual cyber insurance audit process. This practice can help identify any remaining gaps and prepare the clients for the types of questions and checks that auditors may perform.

Summing Up

For MSPs, utilizing compliance scanners is a strategic approach that not only bolsters a client's cybersecurity defenses but also optimally positions them for successful cyber insurance audits. These tools provide a comprehensive view of an organization’s cyber health, facilitate ongoing compliance, and ensure that cybersecurity practices meet industry standards. By effectively using compliance scanners, MSPs can significantly impact their clients' ability to secure favorable cyber insurance terms, reflecting directly on the MSP's value proposition.

What’s Next?

In a world where cyber threats are ever-evolving, ensuring that your clients are well-prepared for cyber insurance audits is more crucial than ever. ConnectSecure offers cutting-edge compliance scanning solutions tailored for MSPs, enabling you to deliver top-tier services that protect your clients and enhance their eligibility for comprehensive cyber insurance coverage. Start with our free 14-day trial or schedule a group demo today to see how our solutions can transform your approach to cybersecurity management and insurance preparation.

Read more:
Q&A: Attorney Eric Tilds on What Every MSP Should Know About Cyber Insurance
Vulnerability Management Basics: What Every Business Should Know
The Lessons from Log4j and Other Zero-Day Attacks