CyberFortress is one step closer to offering full cyber insurance services. The insurance technology startup has launched its downtime risk assessment as a free service to help e-commerce companies reduce their risks from an event that leads to downtime.
CyberFortress will eventually offer cyber insurance policies designed for small- and medium-sized companies.
“The main cyber threat facing e-commerce companies is downtime. A DDoS attack, ransomware, or even a service provider outage or failure can be devastating to an e-commerce company,” stated CyberFortress chief executive Huw Edwards. “If a small e-commerce company can’t collect revenue, they may not be able to make their next payroll, threatening their ability to survive.”
Most insurance providers tend to tailor their cyber insurance policies for large-scale enterprises. Business owners usually must pay large annual premiums upfront for oftentimes confusing coverage options that lack historical data to quantify cybersecurity risks.
Most policies do not cover cyber-instigated business interruption which can lead to significant losses in online revenue. If the company files a claim, the investigation can take many months during which the owner must survive financially before receiving a payout on an insurance policy. Lacking the robust reserves of larger companies, small- or medium-sized business owners may face bankruptcy in the aftermath of a cyber event.
CyberFortress’s newly launched risk assessment service is based on the continuous collection of data from thousands of features and technology choices evaluated over time. A machine learning algorithm provides an assessment of a company’s exposure to suffering downtime.
The algorithm does this by looking at the underlying technology-driven behaviors of e-commerce businesses, which is often overlooked in cybersecurity assessments.
Edwards at first attempted to become a third-party cyber insurance broker selling an existing carrier’s cyber insurance policy. He discovered cyber policies were complicated, lacked risk-based, data-driven assessments, and had painful claims process—in short, “not small-business friendly,” as Edwards told Startups San Antonio.
The experience drove Edwards to create a new kind of cyber insurance company focused on meeting the specific needs of smaller businesses. In early 2018 Edwards left Jungle Disk to launch CyberFortress with four Jungle Disk employees: chief technology officer Michael DeFelice, business development lead Beth Watts, product lead Nate Shames, and operations lead Grant Herbon.
Organizations using CyberFortress’s online assessment receive a free cyber risk score that shows their relative exposure to a downtime event.
“You can have the best alarm system in the world, but if you forget to turn it on then it’s worthless. Behavior matters. And the same is true in cyberspace,” DeFelice wrote. “CyberFortress’s risk assessment model analyzes the nature and pace of technology changes as a proxy for a company’s attitude and approach to security, which helps us quantify the behavioral factors that make or break a company’s security.”
CyberFortress is wrapping up participation in the Silicon Valley-based Plug and Play accelerator program for insurance technology startups with its final pitch Tuesday. The Plug and Play Tech Center is an early-stage investor and innovation platform that matches promising startups with corporate partners in industry-themed accelerator programs.
The next step is for CyberFortress to roll out policies later in 2019 on a state by state basis, with Texas as its first base for operations. Plans are to offer small business owners the option to pay policy premiums on a monthly basis, rather than in one lump annual sum.
Featured image shows the CyberFortress team includes (from left): Michael DeFelice, Huw Edwards, Beth Watts, Nate Shames, and Grant Herbon. Not pictured is Halie Koehler. Courtesy photo.