Multi-factor Authentication for Cyber Insurance: What You Need to Know

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The right cyber insurance policy can protect your business from financial losses associated with cyberattacks. Per the Insurance Information Institute (III), a standard cyber security policy covers the costs required for system recovery, notification, liability, regulatory fines, and legal expenses, among others. It’s worth noting that insurers typically prefer to insure against predictable and quantifiable risks. This means you can lower your insurance costs by implementing risk mitigation strategies. For instance, if you make your business cyber-resilient, you’ll likely pay lower premiums on your cyber insurance coverage. One way to improve your cybersecurity is by implementing multi-factor authentication. In fact, multi-factor authentication is now mandatory for cyber insurance. Here’s some more information on this topic.

What Is Multi-factor Authentication?

Also known as two-factor authentication or 2FA, multi-factor authentication refers to the use of two or more credentials to enhance the security of a network or device, according to the National Institute of Standards and Technology (NIST). It increases the layers of protection, making it hard for an average cybercriminal to gain access to the system. Multi-factor verification typically uses three authentication factors including:

  • Something you know – Such as PINs or passwords.
  • Something you have – Such as smart cards, keycards, and credit cards.
  • Something you are – This includes biometric data such as fingerprints, a retinal scan, or facial recognition.

Why Multi-factor Authentication Is Mandatory for Cyber Insurance

As mentioned earlier, most insurance providers now require their clients to have multi-factor authentication for remote networks, administrative access, and remote access to email. This is due to the recent surge in cases of identity theft in the U.S.

Multi-factor authentication typically helps lower the possibility of data breaches in remote networks as well as the chances of bad actors gaining broader access beyond compromised networks. Additionally, securing corporate email accounts can help protect sensitive data from unauthorized access, something that can save your business from huge financial losses and reputational damage. By lowering the risk of cyberattacks through 2FA, you’d reduce your chances of filing a cyber insurance claim, and in turn, lower your insurer’s financial risk.

Benefits of Multi-factor Authentication

According to Microsoft, multi-factor authentication can block up to 99.9% of attacks on your accounts. With just one layer of protection, a criminal will only need to steal, guess, or crack your password to gain access into your network, unlike 2FA, which provides extra layers of protection. For instance, if an average hacker cracks your password, they may also need your cell phone to access the verification code sent to it, something that will be difficult or impossible to achieve. With even more layers of protection, your accounts will be more secure.

Other Tips to Increase Cyber-resilience in Your Business

Multi-factor authentication is just one of the ways to keep your accounts and networks safe. Some other strategies you can use to enhance your cybersecurity include:

  • Train your employees on how to protect their devices from attacks through means such as avoiding the use of public Wi-Fi, using strong passwords, and watching out for phishing emails.
  • Update your devices and login credentials regularly
  • Implement virtual private network (VPNs) connections for remote workers
  • Install a firewall in your network
  • Restrict employees from logging into certain networks or websites using company computers

Today, it’s virtually impossible to purchase a cyber insurance policy without first implementing multi-factor authentication. At Hoffman Brown Company, we constantly look for insights to help our clients stay safe from a broad range of perils. Contact us today to learn more about protecting yourself with personal cybersecurity insurance.