Cyber threats are growing in scale and sophistication, leaving businesses exposed to crippling financial damages. As a proxy service subscriber, it‘s crucial to understand these escalating risks and how a proper cyber insurance policy can protect your livelihood.
In this extensive guide, you‘ll learn what cyber insurance is, the specific threats proxy users face, how the right coverage keeps your business secure, and expert tips for evaluating providers and policies.
The Intensifying Cyber Threat Landscape
Cyber criminals are constantly evolving their methods, and attacks are surging worldwide. Last year saw ransomware attacks increase by 150%, with high-profile incidents like the Colonial Pipeline and JBS Foods disruptions. Supply chain hacks are also on the rise, where vulnerabilities in trusted third-party software are exploited.
With more businesses embracing digital operations and remote work over the past few years, attack surfaces have grown. Yet many still lack proper cybersecurity measures and insurance safeguards. Without sufficient protection, a single breach can instantly devastate a company.
Some alarming cybersecurity statistics:
- Ransomware costs increased by 170% from 2019 to 2020
- 93% of companies experienced a cyber attack in 2021
- Cyber crime now costs the world $10.5 trillion annually
- A business falls victim to a ransomware attack every 11 seconds
- The average data breach in the US now costs $9.44 million
This severe and growing cyber threat landscape means proxy users need guaranteed financial protection more than ever before.
Why Oxylabs Partnered with Lloyd‘s for Cyber Insurance
Recognizing the escalating cyber risks faced by businesses today, Oxylabs sought to add an extra layer of protection by insurance for themselves and their clients by partnering with Lloyd‘s.
Lloyd‘s of London is the world‘s leading insurance and reinsurance marketplace. They are widely recognized for their strong financial capacity, innovative products, and claims payment reputation.
Oxylabs‘ partnership with Lloyds means all their proxy solutions are now insured under Technology Errors & Omissions and Cyber Insurance policies. This protects Oxylabs and provides clients assurance that losses and liabilities are covered.
The Lloyd‘s underwriting process was extensive, including:
- Rigorous review of Oxylabs‘ information security controls
- Analysis of their network architecture, penetration testing results, and redundancy measures
- Evaluation of their incident response plans, and cybersecurity staffing and processes
This level of scrutiny ensures clients benefit from insurance backed by Oxylabs‘ robust cybersecurity practices and Lloyd‘s stellar financial capacity.
Specific Cyber Risks Facing Proxy Service Users
Proxy services are vital for many online activities, but utilizing them also comes with increased cyber risk exposure. As a subscriber, it‘s important to understand these risks:
Residential Proxy Network Outages
Residential proxies rely on home devices and networks, which tend to be less stable than data centers. Network congestion or hardware failures can more easily cause residential proxy service outages and disruptions for users.
Recent research indicates the average proxy service disruption lasts 2.5 hours and costs businesses an average of $22,000 in lost revenue and productivity. Outages also harm customer experiences, trust, and engagement.
Data Center Proxy Attacks
Data center proxies offer large volumes of bandwidth. But their scale also attracts DDoS attacks, hacking attempts, and other cyber threats seeking to infiltrate or disrupt service.
One mid-size DDoS attack typically costs around $100,000 including lost income and recovery efforts. Larger attacks easily reach millions in damages very rapidly.
Proxy IPs could end up blacklisted by sites trying to block scraping activities, limiting your usage. Sudden blacklisting can severely harm automation and data collection workflows.
Rehabilitating blacklisted IPs often requires manual processes and new infrastructure investments, not to mention lost business income.
Data Theft and Leaks
Proxy services potentially expose customer data to interception or leaks, whether intentionally or accidentally. Breached customer data can be sold on dark web marketplaces.
The average data breach now costs $4.35 million for notification, legal services, PR, lawsuits, and implementing credit monitoring for impacted customers.
Like any technology, proxy services can experience outages or slowdowns due to software bugs, hardware failures, human errors or various mishaps. Service disruptions frequently generate losses for customers.
Evolving Cyber Threats
New hacking techniques, malware strains and vulnerabilities are constantly emerging and putting proxy networks at risk. Staying ahead of threats takes tremendous focus and resources.
This list of risks makes clear the financial importance of cyber insurance for your proxy activities. The right policy serves as a safety net, allowing you to focus on your core business.
Cybersecurity Best Practices to Minimize Risks
While cyber insurance is crucial protection, you should also aim to minimize risks proactively. Here are best practices proxy users should follow:
- Use strong unique passwords and enable multi-factor authentication everywhere possible. Never reuse passwords.
- Install comprehensive endpoint detection and response software to monitor for suspicious activity.
- Maintain regular software updates, patches and upgrades to close vulnerabilities.
- Backup data frequently and keep copies offline to enable quick restoration after an attack.
- Control access to systems strictly based on least privilege principles.
- Develop a cyber incident response plan for detection, containment and recovery procedures.
- Conduct penetration testing and risk assessments at least annually.
- Use a cybersecurity-focused managed service provider if in-house skills are lacking.
- Carefully evaluate cyber risks and controls for any third-party vendors.
Taking prudent cybersecurity measures allows you to get the most value from your cyber insurance investment, while avoiding as many incidents as possible.
Key Factors in Evaluating Cyber Insurers
When exploring cyber insurance options, you‘ll want to compare multiple providers. Here are crucial factors to assess:
- What dollar amounts are provided for various loss types? Look for at least $1 million.
- Is social engineering covered? Many policies now exclude it.
- Are losses from software bugs and human errors covered?
- For service disruption claims, are contingent business interruption losses covered?
- What out-of-pocket costs will you pay per claim? Typical ranges are $10,000 to $50,000.
- What cyber incidents won‘t be covered? For example, many exclude losses due to war or government actions.
- Do they have a solid history of paying out claims fairly and quickly? Check online reviews.
Financial Strength Ratings
- Insurer should have a rating of "A" or higher from agencies like A.M. Best and Standard & Poor‘s.
- Premiums often range from $1000 to $3000 annually for $1 million in coverage, but costs vary widely based on risk exposure, revenue size and more.
- Consider options like breach counseling services, public relations assistance, cybersecurity assessments or access to ethical hackers.
Carefully examining these facets will help you find the right cyber insurance partner for your proxy activities. Be sure to ask insurers detailed questions and clarify any concerns.
Helpful Questions to Ask Prospective Cyber Insurers
- Do you have experience covering proxy service users specifically?
- Will policy cover losses both from my own systems and from vendors?
- Does coverage apply regardless of incident location?
- Does definition of "data breach" go beyond just personal information?
- What metrics are used to calculate business interruption coverage amounts?
- What expert resources will be available to assist after a cyber incident?
- How quickly are claims acknowledged and paid out on average?
- Will policy cover costs involved with new regulations and laws related to data?
- Is ransomware treated the same as any other cyber incident?
Recommended Cyber Insurance Policy Limits By Business Size
|Business Revenue Size||Recommended Cyber Insurance Limit|
|Under $5 million||$1 million|
|$5 million – $25 million||$5 million|
|$25 million – $100 million||$10 million|
|Over $100 million||$25+ million|
Of course, higher limits are always better for optimal protection. The limits above are minimum recommendations based on typical small, medium and large business risk profiles.
Watching for These Common Cyber Insurance Exclusions
While cyber insurance delivers invaluable protection, policies do contain exclusions you need to be aware of. Here are some of the most common:
- Acts of war, terrorism or sabotage
- Ongoing hacks or incidents started before policy inception
- Financial fraud or social engineering losses
- Natural disasters or power failures
- Loss of intellectual property value
- Claims by subsidiaries against other entities within your company
- Illegal or illicit activities
Review all exclusions closely and have your broker clarify any that are unclear before binding coverage. It‘s also wise to ask about policy options that "buy back" certain exclusions you‘re concerned about.
Cyber Insurance Loss Scenarios Your Business Could Face
To understand how cyber insurance works in practice, here are a few example loss scenarios a proxy user could experience:
Large Residential Proxy Network Outage
Let‘s say a widespread internet outage takes down your residential proxy service for 18 hours before connectivity is restored. This causes significant downtime for your business operations. The cyber policy would cover income your business lost during the outage duration.
Proxy Service Hacked by Ransomware Attack
If your proxy network suffers a ransomware attack, the policy pays the ransom amount (often with limits) and any costs involved with investigating the incident, restoring data from backups, adding security enhancements, and lost income during recovery efforts.
Class Action Lawsuit After Proxy Data Breach
Your proxy service exposes account usernames and passwords, opening the door for a class action lawsuit alleging privacy violations. The cyber policy pays all your legal defense bills and any settlement amounts or damages awarded (up to the policy limit).
Cyber Extortion Threats
A criminal gang penetrates your systems and threatens to sell accessed customer data or destroy servers if a sizable extortion payment isn‘t made. Your cyber insurance policy covers any extortion payments while also reimbursing costs to verify data integrity and enhance security after the incident.
As these examples illustrate, the right cyber insurance policy can be a lifesaver for proxy service users when cyber incidents strike. Make sure you understand exactly which loss scenarios are covered before purchasing a policy.
Getting the Most Suitable Cyber Insurance for Your Situation
Here are best practices to follow when evaluating cyber insurance programs and partners:
- Be clear about your existing cybersecurity practices and controls during the application process. Robust protection typically earns lower premiums.
- Work with an insurance broker well-versed in cyber policies. They can explain options and negotiate optimal terms on your behalf.
- Seek out insurers who offer value-added breach response services to policyholders for helpful support when incidents hit.
- Request quotes from at least 5 highly-rated insurers for comparison. Prices and coverage can vary significantly.
- Inquire whether policy terms will adapt as your business changes, like adding new products or doubling revenue.
- Carefully document any new cybersecurity measures you take so that your coverage limits can scale up accordingly at renewal.
- Consider a hybrid policy blend, like errors & omissions plus cyber breach coverage, for comprehensive protection.
Taking the time to properly shop for cyber insurance will ensure your proxy usage and assets have trusted financial protection.
Conclusion: The Essential Protection Proxy Users Need
Cyber risks are accelerating, but they don‘t need to paralyze your business. Armed with cybersecurity best practices and reliable insurance, you can have confidence that your livelihood is shielded from the ever-changing online threat landscape.
Cyber insurance fills a crucial role for proxy users by covering financial fallout when incidents occur. Make sure you secure coverage specifically tailored to your proxy needs from a reputable, financially sound insurer. With prudent cyber insurance as part of your risk management strategy, you can continue driving business growth without leaving your livelihood exposed.