Within our fast-paced society of a myriad of ever-evolving cyber threats, prudent business decision-makers wary of cyberattacks will explore cyber insurance to help them put the pieces back together again. Ransomware attacks and data breaches require specialized expertise and ready cash to confront and redress. And so for those reasons, many owners and leaders opt to purchase cyber insurance to financially shield their company in the chance of an incident.
Once upon a time, cyber security insurance came as a supplement to an existing policy — a supplement that could either be pricey or cheap. Nowadays, cyber insurance has developed its niche and has become a critical assurance for businesses everywhere, no matter the size.
Bear in mind, however, that cyber insurance can’t and doesn’t fix all tech-related disasters, and it will not directly prevent an attack or breach. Ever. Just as any business with physical assets must put measures in place for security, the same applies to digital and intellectual property.
Yet is cyber insurance ever denied? Of course! It can be denied just like any other insurance product. The following are some common reasons for getting denied cyber insurance.
Cyber insurance as unique as your business
Run-of-the-mill business insurance doesn’t always make the cut. In fact, generic insurance rarely even considers data loss. Of course, overlaps exist among cyber insurance policies, but businesses should obtain coverage as individualized as they are.
Beyond the bare bones, policies also offer enhancements and additions, resulting in you being unaware of what to look for. The enhancement of social engineering coverage exists for when employees get hoodwinked into taking risky actions. There’s also reputational harm coverage and coverage for technology bricking (replacing hardware technology rendered unfit after a malware infection). It’s up to you to cover everything that’s important to you.
Even if businesses prequalify for cyber insurance, getting denied remains a real possibility. Even if you’ve enjoyed cyber insurance before, rejection can still come down the line, and there are many reasons behind getting denied.
Flimsy plans for disaster recovery and continuity
All insurance providers offer their products to gain a return on investment, and cyber insurers are no exception. If a provider lacks confidence that your business can recover from a breach or attack, they’re apt to deny your application. And don’t kid yourself: disaster recovery means a lot more than just running decent backups. Sure, that’s part of it. Yet overall, businesses need an adequately comprehensive disaster recovery plan to ensure their survival in the case of a cyber event.
Weak account security
Although it seems like a small detail, cyber insurance providers often deny coverage due to an applicant’s lack of multi-factor authentication. Before they offer a policy, many providers often investigate the practical security of user accounts.
Lack of cybersecurity awareness
Personnel training is vital for fostering adequate, company-wide cyber security. Employee involvement remains one of the fatter targets in business security, and cybercriminals are aware of it as well. It is essential to continuously train employees on the ever-evolving cyber threat landscape.
Inadequate endpoint security
Often policies demand many more security features than antivirus software. Businesses should also deploy endpoint security on every device connected to their network, sometimes even on IoT devices. Insurers look for businesses to have this as their main line of defense in their cyber security strategy. Insurance companies often require detection and response tools for endpoints to deny cybercriminals access. Such tools often incorporate layered protection spanning a range of techniques for detection and prevention. Solid endpoint protection not only lowers cyber insurance premiums, but it positions applicants for acceptance.
IT service providers can assist in qualifying for cyber insurance
The mere application for cyber insurance might seem daunting — even before the thought of being denied coverage. And yet a one-time rejection means it’s even harder to obtain coverage in the future. Yet this obstacle course is exactly where your outsourced IT service provider can help.
By leveraging an IT service provider to assist with prequalification, you’re guaranteeing you have pros looking into your application from a place of deep experience. Your company’s IT provider can help you shore up the weak links if you find yourself falling short of qualifying for a cyber insurance policy.
Application, prequalification, avoiding coverage denial and staying current for cyber insurance can seem like a jungle of variables. Yet IT service providers can help you obtain cyber insurance and even prequalification by assisting businesses to identify and hit the requisite criteria. In fact, we have free resources to help you qualify.