Business
August 4, 2022

The Importance Of Cyber Insurance in Education: A Broker's Guide

Cyber insurance is no longer enough – educational institutions today need to update their security as well. Here's how to help them.

1Fort Team

According to research by Checkpoint, in 2021, the education sector saw a 29% increase in cyber attacks. An increase driven by the shift to remote learning at the beginning of the 2020 pandemic.

However, as one of the least secure major industries with a gold mine of sensitive personal data and weak cybersecurity, this sector continues to be an easy target for cybercriminals.

But, while cyber security will always be the first line of defense, educating and selling cyber insurance to those in the education sector is just as crucial, considering the chances of a cyber breach even while taking cyber security measures.

So if you're a broker looking to learn more about major cyber threats facing schools, universities, and other learning institutions, along with the solutions to sell to them, then look no further.

In this blog, we'll take you through all the need-to-know information on cyber threats facing the education sector and how to sell cyber insurance to help them mitigate risks.

Top Cyber Threats in The Education and How Cyber Insurance Helps Mitigate Them

While cyber threats are not always easy to identify, there are some important things to know. First and foremost, cyber risks can take many forms in the educational sector. It can be a physical security breach, like a break-in as a result of a hacked laptop or computer. Or it can be something more intangible, like online bullying or data theft. Secondly, cyber threats can come from anywhere. They’re not limited to just individual users, which means that schools need to protect themselves from attacks from all angles, which cyber insurance helps them do.

1. Cyber Insurance Helps Retrieve Lost Data

In one of the biggest cyber attacks on an educational institution to date, cyber criminals hacked a vendor of the New York City school district, exposing the records of 820,000 students by breaching the company's system.

If you're selling cyber security & insurance to a school, you can highlight the importance of safeguarding a child's personally identifiable information (PII) and what could go wrong if stolen. The perpetrator can use the PII information for years(without being caught) to open bank accounts, mortgages, and even make purchases.

Cyber insurance can help minimize data breach damage by covering the costs of retrieving lost data, so it doesn't end up in the wrong hands.

2. Cyber Insurance Covers The Cost Of Ransom & Business Downtime

Only second behind the government, the education sector is one of the most at risk for ransomware attacks. And they can be extremely costly. The average demand being $312,493 in 2020, and the average lifecycle of a breach lasting 279 days.

A cyber attack, combined with business downtime and external factors like a pandemic, can cost an institution an entire academic year, and the risk of shutdown, like in the case of Lincoln College in Illinois.

Cyber insurance can help pay the ransom and also covers downtime costs until the institution can find its feet and resume its processes.

3. Cyber Insurance Covers Fines & Ensures Legal Compliance

Data privacy laws in the United States differ depending on the type of institution. But, generally, data privacy laws in the educational sector focuses on three main areas: Personally Identifiable Information (PII), student data, and health data.

PII is any information that can be used to identify an individual. More specifically, in the educational sector, this includes things like student data, like names, Social Security numbers, and addresses, grades, test scores, and transcripts. And health data like medical records and insurance information.

Putting this information at risk because of failed cyber security can cause extensive financial and reputation damage and even risk the safety of students. However, cyber insurance can help your client can mitigate many helping to cover the cost of a legal representative if a third party sues, managing the communication, and can also help cover the cost of potential steep fines.

4. Cyber Insurance Restores Lost Reputation

Your institution's response to a cyber attack can make or break your reputation. Parents entrust their children — and their data — to your care, and they expect you to take every measure to protect it.

Cyber Insurance can help hire forensic IT consultants to determine the origin of the breach, alert affected parties whose data is exposed, and also help set up a hotline to answer queries from worried students and their families. The insurance also takes care of any payouts that need to be done to the affected parties.

How to Get Started Selling Cyber Insurance to the Education Sector

The education sector faces an ever-growing threat of cyber attacks. And many realize this, which is why they are increasingly turning to cyber insurance to protect themselves.

As a result, there is a growing market for selling cyber insurance to educational institutions, and as a broker, you want to take advantage of this opportunity. But how exactly do you get started?

Here are a few tips:

  1. Understand the unique risks that educational institutions face when it comes to cyber-attacks.
  2. Find a good cyber insurance carrier through a solution like 1Fort. Ensure that policies meet the specific needs of the education sector.
  3. Develop a sales strategy that resonates with educational institutions.

Setting Your Education Clients Up With The Best Coverage and Protection

As the number of cyber-attacks increases against educational institutions, cyber insurance can be an invaluable investment. Covering a wide range of risks, as mentioned in this blog, such as data breaches, cyber extortion, and ransomware attacks, great cyber security, and cyber insurance can help your clients protect not only themselves but one of the most vulnerable populations–children.

1Fort offers an all-in-one solution for cyber security and insurance. As a broker partnering with 1Fort, you can rest assured knowing you're giving your clients the best protection on the market – and the most valuable of all – peace of mind.

Schedule a demo with a member of our 1Fort team.

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1Fort works with a select group of brokers who specialize in cyber insurance.

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