With Cyber Security risk presenting what feels like a Sisyphean effort to overcome, a mature cyber program can also incorporate the transferring of risk through the use of Cyber Insurance, Contracts as well as Outsourcing.

Cyber insurance isn’t a one-size-fits-all solution. Instead, there are various types of cyber insurance policies available. These include:

• First-Party Coverage: Protects your organization against direct losses (e.g., data breaches, network disruptions).
• Third-Party Coverage: Covers liability claims from third parties (e.g., customers, vendors).
• Business Interruption Coverage: Addresses financial losses due to cyber incidents.
• Legal and Regulatory Costs: Covers legal fees and regulatory fines.
• Breach Response Costs: Includes expenses related to incident response, notification, and credit monitoring.

Contracts can help clarify responsibility and risk. These should include:

• Clear, concise contract terms: Define responsibilities and liabilities between parties.
• Service-Level Agreements (SLAs): Sets vendor and customer expectations for the service to be provided.
• Indemnification Clauses: Specify who bears the risk in case of a cybersecurity breach or in other scenarios.
• Vendor Contracts: Ensure vendors assume responsibility for their security practices.
• Cloud Service Agreements: Clarify security responsibilities in cloud environments.

Outsourcing and utilizing third-party services allow you to shift the risk to another party:

• Managed Security Services Providers (MSSPs): Transfer security responsibilities to external experts.
• Cloud Service Providers (CSPs): Rely on their security infrastructure and expertise.
• Third-Party Audits: Assess vendors’ security practices before engaging with them.

A note about Outsourcing and Third-Party Services. While relying on Third Parties, you still have to confirm that the expected configurations are enforced and the standards you expect are met. Many providers offer built in security configurations, they may not be implemented by default and should be tuned for each use case.