The Role of Patch Management in Cyber Insurance Payouts to the Casino Industry

In today’s vast digital landscape, cyber threats are around every corner and safeguarding the casino environment has never been more essential. One of the most crucial aspects in a defense strategy is patch management – the process of regularly updating software and hardware to mitigate vulnerabilities and enhance security. While still often overlooked, patch management plays a pivotal role not only in fortifying the gaming defenses against cyber-attacks but also in ensuring favorable outcomes in the area of cyber insurance payouts.

One of the simplest ways to reduce your premiums and ensure a full payout in the event of a breach, is adequate patch management. A breach of any kind may reduce the casino’s ability to obtain cyber insurance in the future.

 

Understanding the Patch Management Imperative

Patch management involves identifying, acquiring, and applying patches to systems to correct vulnerabilities or misconfigurations which could be exploited by attackers. These vulnerabilities are often discovered and reported by security researchers or through monitoring systems. Without prompt patching, these weaknesses leave the systems open to exploitation, potentially resulting in data breaches, system compromises, financial losses, and possibly reputation damage.

 

The Link Between Patch Management and Cyber Insurance

In ongoing risk management practice, cyber insurance has emerged as a crucial component for organizations in protection against cyber threats. Cyber insurance policies typically cover various expenses related to cyber incidents, including forensic investigations, legal fees, data recovery costs, and even extortion payments. However, the payout from these policies is not guaranteed.

 

The Role of Patch Management in Cyber Insurance Payouts

When assessing a cyber insurance claim, insurers scrutinize the organization’s cybersecurity practices, including its patch management protocols. Failure to implement adequate patch management measures can significantly impact the payout of a claim. Carriers have argued that the organization’s negligence in patching known vulnerabilities may have contributed to the severity of the incident, potentially reducing the payout, or denying coverage altogether. The lack of effective patching illustrates the lack of awareness on behalf of the client which is the sole result of the breach.

 

Mitigating Risk Through Proactive Patch Management

The effectiveness of your cyber insurance policy depends on proactive patch management. Key strategies in reducing risk to the casino:

• Know Your Cyber Insurance Contract: One critical vulnerability existing on a system which was published over 45 days from date of breach could reduce the payment by 50%. In other words, Read the fine print of the carrier’s agreement with the casino. Synergy has experienced several contracts which have a provision about non-conformance of patching which can result in a reduction of payment or even non-payment by the carrier.
• Establish a Patch Management Framework: Develop a comprehensive patch management policy that outlines roles, responsibilities, and procedures for identifying, testing, and deploying patches across your IT environment.[1]
• Establish Adequate Change Windows: The casino environment is a 24/7 operation with little to no downtime warranted for remediation. Casino Senior leaders need to understand scheduled outage windows for maintenance are better than unscheduled outages resulting in loss of revenue and brand awareness. 66% of survey respondents experienced revenue loss and 53% stated their brands were damaged as a result.[2]
• Automate Patch Deployment: Leverage patch management tools and automation technologies to streamline the patching process and ensure timely deployment of security updates across all systems and devices.
• Prioritize Critical and High Ranked Vulnerabilities: Focus on patching critical and high-severity vulnerabilities that pose the greatest risk to the casino’s security posture. Stay informed about emerging threats and prioritize patches accordingly.
• Regular Vulnerability Assessments: Conduct regular vulnerability assessments and penetration tests to identify weaknesses in the systems and prioritize patching efforts based on the severity of identified vulnerabilities.
• Know Your Environment: Asset management is critical in reducing risk. If the organization does not know what is on the network, it is impossible to patch and remediate the unknown. Establishment of a good asset management tool to not only track but discover new systems. Align system priorities with critical systems first; financial, gaming, hotel operations, etc.
• Stay Vigilant and Responsive: Monitor security advisories from software vendors and security researchers, and act swiftly to apply patches as soon as they become available. Subscribing to threat intelligence feeds is critical. Timeliness is key to mitigating risk and demonstrating diligence to insurers.

 

 

Conclusion

Cyber threats continue to evolve in sophistication and frequency, proactive patch management should be non-negotiable even in an always available environment like the casino. Beyond strengthening your defenses against cyber-attacks, effective patch management is intricately linked to the success of your cyber insurance policy. By prioritizing patch management and implementing robust cybersecurity practices, the casino can reduce risk, increase cyber resilience, and look for a favorable outcome in the event of a cyber incident. When it comes to cybersecurity, prevention is always better than cure.

[1] https://www.marsh.com/uk/services/cyber-risk/insights/cyber-resilience-twelve-key-controls-to-strengthen-your-security.html

[2] https://www.cybereason.com/hubfs/dam/collateral/ebooks/Cybereason_Ransomware_Research_2021.pdf