Why DFIR Is Needed in Partnership with Cyber Insurance

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Cyber Insurance is Becoming Critical For More Organizations with Cybercrime Accelerating in Both Severity and Costs

Too often, cybercrime victims learn what kind of applicable coverage they have after a security incident has occurred. Insurance purchasers and providers alike have become much more specific about inclusions and exclusions in policies, including specific cybersecurity policy riders.

Insurance is necessary to mitigate scores of financial, regulatory, reputational and other costs that cyber risks inflict on companies. However, our firsthand experience across industry sectors shows recurring patterns across threats and incidents that organizations and insurance providers are contending with. In this whitepaper, we will review patterns of attack, the need for digital forensics and incident response (DFIR) and the importance of reporting as it relates to paying out insurance claims.

Patterns of Attack

Business email compromise (BEC) scams alone are staggeringly common and effective. Between January 2014 and October 2019, the FBI’s Internet Crime Complaint Center (IC3)1 received complaints totaling more than $2.1 billion in BEC losses. The ability to hijack an authentic executive email account or create a fake message close enough to trick a distracted employee, makes anyone a well-armed robber with the means to pull off a heist and sow confusion in their wake because BEC scams blur the lines between traditional, digital “break-ins’’ and fraud.

It’s one thing if an attacker evades layers of defenses intruding into your perimeter, but what if they just impersonate the boss via email or social media instead? How much are companies’ policies, security controls and insurance designed for the former scenario, versus the latter? This is an example of an urgent area we help customers study, to keep claims and coverage from resting on dated thinking or assumptions.

Another massive cyber insurance catalyst hard to overstate is ransomware. Ransomware is a simple, accessible cybercrime enterprise for individuals to launch and operate and is highly adaptive. For example, adversaries behind ransomware variants like Ryuk, Sodinokibi and Maze show lucrative sophistication in how they ratchet-up extortion while offering to “settle the matter” of ransom payment in terms and tone usually seen in business negotiations. Maze pioneered the extortion tactic of releasing ransomed files to the public, just one example of a data breach threat if ransoms are not paid.

Cyber insurance policy prices are skyrocketing due to the increase in ransomware cases over the past year. With that higher price comes less coverage.


While many ransomware campaigns can have the feel of scale and opportunism over strategy – target masses of people with one exploit and see what detonates – other schemes are more targeted. As Pondurance CISO and VP, Services, Dustin Hutchison, described patterns of attacks against healthcare businesses, in a Data Breach Today2 article, “A threat actor may view the compromise of one entity holding so much data as much more attractive than targeting each client organization, based on the effort versus reward.”

Adding to the stress of ransomware’s business impact is its attackers’ inherently lingering, real time nature. Unlike attacks that might steal or expose sensitive data, before vanishing and leaving those files intact, ransomware thrusts companies in a stressful race against the clock. Administrators and incident responders must rapidly determine how many affected systems are ransomed, what type of malicious program is being used to hold files hostage and whether a company’s back-up and recovery capabilities are able to quietly restore files and operations. Digital Forensics and Incident Response (DFIR) underpins everything.

These situations prove that digital forensic and incident response capabilities and professionals responding to a cybersecurity incident shape the outcome of everything: Determining what happened, the extent of damage, triaging what is known and setting the pace for recovery.

Why You Need Digital Forensics & Incident Response (DFIR)

A digital forensics and incident response (DFIR) firm partners with customers to swiftly contain incidents and conclusively restore systems after an attack. A DFIR will be familiar with your organization and have an understanding of your network in the case of a cyber incident.

DFIR services exist to prevent a hall of mirrors from needlessly impeding response actions, execution of incident response plans and supporting crucial processes that affect insurance claims and other dependencies. Whether at the first subtle signs of suspicious network activity, or the rapid physical disruption of commerce, transportation and healthcare – as in the case of the NotPetya ransomware – DFIR teams deploy at a moment’s notice to intercept attacks, save precious electronic evidence, perform damage control and determine what is necessary for secure restoration. Importantly, they may have to do these steps simultaneously or in very specific order to best-serve the victim, whose industry might also have norms about calling in law enforcement, notifying regulators, proving compliance to insurance or sharing intelligence with peers.

  • 51% of cyber claim costs

    were associated with IT forensics in 20183

It is no surprise that DFIR roles and relationships determine cyber insurance’s current stakes and foreseeable future. Did you know that according to Society Insurance, 51% of cyber claim costs were associated with IT forensics in 2018? If an organization does not have sufficient DFIR experts and resources in place before an incident happens, they can easily end up paying more for remediation in the end – without the advantages these experts and experience could have delivered along the way.

Between incidents and particularly when insurance policies are being acquired and updated, Pondurance combines veteran DFIR insights with advisors’ eyes to proactively examine customers’ posture and preparedness.

Be Proactive with a DFIR Partner

With a DFIR partner in place, companies demonstrate to insurers that they are taking proactive, responsible steps to pursue comprehensive defense strategies. In turn, they greatly lower their risk profile and reduce premiums.

It is important to not only be ready to react to threats but also have the reporting tools to show insurance providers that security protocols were in place when the breach happened. Should a compromise occur, a DFIR partner will serve as a trusted representative of its customer in working with the provider to deal with the recovery process including providing specific reports that the insurance carriers need to file claims. This leads to far better results than “starting from scratch” in the heat of a breach and makes an easier process to file claims with any carrier.

Know what’s covered...and what isn’t

Knowing your insurance policies’ coverage and limits before a cyber incident happens is crucial. Uncertainty can cost a great deal in response time and financial losses. While digital risks apply to nearly every facet of business today, insurance sold to cover common business risk does not always cover their “cyber” equivalents.

As a 2020 report from the Organisation for Economic Co-operation and Development (OECD)4 notes, “Much of the variation in coverage results from differences in definitions, conditions and exclusions as policies have evolved very quickly, hindering the emergence of standardised language.”

It is common for a company to call our team in for urgent incident response and not realize until halfway through the engagement whether they actually have applicable cyber coverage, because there may be confusion about what different corporate policies cover. This is a classic example of why it is important for every company’s cross-functional crisis response team with members representing the C-Suite, operations, risk, legal, IT and other departments to have a clear understanding of current insurance coverage beforehand.

Have a security advisor and advocate before, during and between crises

Navigating cyber insurance’s higher stakes is a daunting proposition for even the largest Fortune 500 organizations. Buyers seeking new or updated insurance policies need an objective, outside set of eyes to help scope and tailor coverage, while providing ongoing risk management advice.

Pondurance performs this role across a host of industry sectors, bringing years of insight from monitoring customer networks, responding to incidents, tracking evolving threats and distilling data necessary for more risk-based decision-making.

When finalizing cyber insurance policies, policyholders benefit from “writing in” (specifying) their designated, go-to response firm for incidents. Specifying your own response firm, particularly one already familiar with your operations and insurance situation, is a pivotal step underpinning the total value of a policy.

Pondurance takes the data-first philosophy into every security consultation, insurance assessment and advisory conversation any time customers launch M&A, modernization, pandemic response and other initiatives. Following the data is essential for dispelling assumptions and a false sense of security. Companies cannot afford to wait until a crisis happens to discover whether an incident is covered.

A policyholder not establishing their designated firm will have to work with one of their insurance carrier’s default, incident response partners who focus on meeting the carrier‘s interests, first and foremost.

In cyber insurance matters, Pondurance works as the policyholder’s advocate and ally, using knowledge of our customers’ security architecture and wider industries to conclusively determine what happened, from the root cause of an incident through downstream consequences. In incident response work, Pondurance helps customers execute plans and facilitates crucial time-sensitive processes, from helping preserve evidence and IT operations, to supporting insurance claims and independently verifying when affected systems are fully restored. In a tornado analogy, this goes beyond measuring holes and taking pictures of debris. Pondurance helps clients with the IT equivalents of getting utility services restored, inventorying possessions in a new, secure space and assessing how recovery construction can improve ruggedness and resiliency in the end.

Specifying your own response firm, particularly one already familiar with your operations and an insurance situation is a pivotal step underpinning the total value of a policy.

Hear From Our customers

“We thought we had been making the right security investments. Then we had an incident and brought in Pondurance. They immediately proved their value and earned our trust due to their immense expertise and guidance throughout the entire process. We simply wouldn‘t have been successful without them.“

Steve Long, CEO Hancock Health


Cyber insurance is among the most important technology, legal, risk and reputational decisions a cross-functional team of senior leaders can make. Above all, leaders need advocates and partners making sure they have proper coverage in place and readiness to respond at the first sign of trouble. Pondurance is that advocate and strategist for a wide set of customers in many different industries but specializing in healthcare, manufacturing and government.

Whether you plan to acquire cyber insurance in the coming months, are looking for advice on competing policies or are due for renewing coverage, contact us to arrange a conversation about your objectives. Our team has the experience, data and skills necessary to maximize cyber insurance’s advantages.

About Pondurance

Pondurance delivers world-class managed detection and response services to industries facing today’s most pressing and dynamic cybersecurity challenges including ransomware, complex compliance requirements and digital transformation accelerated by a distributed workforce.

By combining our advanced platform with our experienced team of analysts we continuously hunt, investigate, validate and contain threats so your own team can focus on what matters most.

Pondurance experts include seasoned security operations analysts, digital forensics and incident response professionals and compliance and security strategists who provide always-on services to customers seeking broader visibility, faster response and containment and more unified risk management for their organizations.