As cyber threats become more diverse, many companies view cyber insurance as a safety net against potential cyber incidents. With data breaches and ransomware attacks becoming more complex, specialized expertise and resources are often required to handle such situations. Consequently, numerous business owners opt for cyber insurance to secure financial support in case of a cyber incident. Below, we discuss some reasons why a business might be denied cyber insurance coverage.
Cyber insurance has evolved from being either costly or a minor add-on to existing policies. It now caters to a niche market and has become a crucial necessity for many businesses.
However, it’s essential to recognize that cyber insurance doesn’t serve as a comprehensive solution to all cyber-related issues, nor can it prevent cyberattacks or data breaches. Just as physical businesses implement security measures for their premises, companies with intellectual property must also establish appropriate safeguards.
Tailored Cyber Insurance for Individual Businesses
Conventional business insurance often overlooks data loss concerns. While there can be overlaps in various cyber insurance policies, businesses should seek coverage that aligns uniquely with their operations.
Beyond fundamental coverage, insurance policies can include additional enhancements. Examples include coverage for social engineering incidents involving employees, reputational harm caused by security breaches, and technology replacement due to malware-related equipment damage. Ensuring comprehensive coverage requires careful consideration of every significant aspect.
Preparing for Cyber Insurance
Even if businesses meet the prerequisites for cyber insurance, they can still face denials. This situation holds true even for businesses that have previously held cyber insurance policies. Multiple factors contribute to such denials.
Inadequate plans for business continuity and disaster recovery: Insurance providers seek a return on their investment. If a provider doubts a business’s ability to recover from a disaster, they might reject the application. Effective disaster recovery goes beyond simple backups; it necessitates robust plans to ensure business survival after a cyber event.
Weak account security – Lack of Multi-Factor Authentication: Cyber insurance coverage might be denied due to insufficient account security, particularly the absence of multi-factor authentication. Providers often prioritize account security before offering a policy.
Insufficient Awareness of Cybersecurity: Employee training is vital for maintaining robust cybersecurity. Unfortunately, employee engagement often represents a weak point in business security. Continuous employee training is essential, adapting to the evolving nature of cyber threats.
Lack of Endpoint Security: Many policies require more than standard antivirus protection. Comprehensive endpoint detection and response tools, incorporating various detection and prevention techniques, are often necessary.
Leveraging NSA for Cyber Insurance Planning
Facing denial for cyber insurance can be daunting, and subsequent attempts can become even more challenging. Network Security Associates (NSA) can offer assistance at this juncture.
Engaging NSA for cyber insurance planning means expert eyes scrutinizing your infrastructure. NSA can address areas that require enhancement, improving the chances of qualifying for cyber insurance.
Concluding Thoughts
Even with preparation, cyber insurance coverage may be denied. In order to get the best chance of approval, and the best premium, pay close attention to the bullets above. While they may seem daunting, they are critical. NSA has been simplifying the cyber insurance process over the last 20 years. If you have any other questions, please don’t hesitate to get in touch with us. We are here to help.