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Why Your Cyber Insurance Premiums Are On the Rise

Welcome to the latest issue of The Districts, where we chronicle the people, issues and activities impacting special districts across the U.S.

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An explosion of cyberattacks is driving big changes in the cyber insurance market — making it more difficult and expensive for special districts to get coverage.

The spiking number of cyber insurance claims, driven largely by ransomware incidents, is prompting insurers to raise premiums, set new coverage limits and demand that organizations implement key security controls before they’ll issue new policies, says Christopher Keegan, cyber and technology national practice leader for Brown & Brown, one of the nation’s largest commercial insurance brokers.

“Claims are up in the region of 250 percent from 2017,” said Keegan in a presentation to Special Districts Program Advisory Board members in March. “What that means is a lot of companies in the cyber insurance market are not profitable anymore and to climb back to profitability they are raising premiums."
Insurers are also asking more questions about existing IT environments and cybersecurity practices during the underwriting process. Policy applications for large organizations can be extensive, with some covering more than 400 questions, says Keegan.

He says insurers increasingly require organizations to have security measures in place to prevent attackers from breaching systems and limit the damage caused by successful attacks.

Key security controls include:
  • Multifactor authentication (MFA) for all internet-connected systems to prevent attackers from breaking into systems
  • MFA on privileged accounts and segmentation between IT systems and operational technology to prevent attackers from moving between systems after a successful attack
  • Offline or immutable data backups to enable organizations to recover important data without paying a ransom
“It’s getting to the point where these are must-haves in order to get insurance,” Keegan says. “Or if you don’t have them now, you need to be able to say when they will be in place.”
Join Our Cyber Chat with Former CISA Director Christopher Krebs

Get a unique perspective on critical cybersecurity issues from Christopher Krebs, former director of the U.S. Department of Homeland Security’s Cybersecurity and Infrastructure Security Agency (CISA). On April 12, we’ll host a fireside chat with Krebs covering how cybersecurity risks are evolving, insights into the new State and Local Cybersecurity Grant Program and practical advice for addressing growing security risks.

Register now to save your spot at this exclusive event.

Get Ready for the Year Ahead

The 2022 Special Districts annual kickoff event explores key priorities and challenges for special district leaders in the coming year. The on-demand session offers important insights from district officials and industry experts on modernizing and securing critical systems, tapping into federal funding sources and more.

For example, Jeffrey Small, CIO for the Great Lakes Water Authority (GLWA) in Michigan, outlines his district’s modernization plans during the event. Projects underway include a new asset management system that will transform how GLWA maintains its sprawling water and wastewater infrastructure, as well as a new program management system to oversee a portfolio of capital projects worth about $1 billion over the next five years.

GLWA also intends to kick off an enterprise ERP deployment that will replace multiple legacy finance and HR applications, says Small, adding, “All of the projects I’m talking about will leverage SaaS solutions as we continue to increase our cloud presence.”

Watch the session.

District Spotlight: Coordinating California Transit

A bill to coordinate 27 transit providers in the San Francisco Bay area is working its way through the California state legislature. If signed into law, the measure would put the region’s existing Metropolitan Transportation Commission in charge of forming a more coordinated transit network across nine bay area counties.

Perhaps most significantly, the bill would require the integration of fare-payment systems across the region, enabling riders to pay a single fare for trips that involve multiple transit providers.

“Instead of paying each separate full individual fare at each transfer point, the rider would be able to pay an upfront total trip fare that is scaled based on the overall length of the trip and could carry discounts with them across agencies,” said state Sen. Josh Becker, who introduced the legislation. “This would also allow for piloting different types of transit pass products, like a one-day pass that covers multiple agencies or even a zone-based fare system for regional services.”

Read the full story.

More Articles Worth a Read

Here are more stories from special districts around the country. Share your own news with us for inclusion in the next newsletter.

New York’s Metropolitan Transit Authority received an additional $769 million in federal grants to offset losses associated with the COVID-19. MTA was one of 35 transit agencies to get more relief funding in March from the U.S. Department of Transportation.

New 3-D scanners are in place at the Niagara Falls International Airport, part of a national effort to strengthen detection of explosives. The new equipment should improve security screenings and help security lines move faster.