Cybersecurity insurance companies are changing the way they do business.
Cybersecurity Insurance Denied Claims
How sure are you that your cybersecurity insurance claim will be approved? According to Statista, a leader in technology statistical and survey results, the cybersecurity insurance market is expected to grow to an overwhelming 20 billion U.S. dollars by 2025 because cybercrime is one of the most significant risks to businesses worldwide. Insurance companies have experienced an unsustainable burden of claim payouts and are leaning on analytical data to make a profit and mitigate cyber risk. For this reason, they have had to make substantial changes to their policies.
Cybersecurity Insurance Hike Increase
According to Delinia, a leader in the Frost Radar report for Privileged Access Management, 80% of businesses have used their cybersecurity insurance at least once, and almost half used it multiple times since procuring their policies. For this reason, insurance companies have increased their contracts by 50-100%. In addition, the time to new or obtain an insurance policy is six months or more.
Cybersecurity Insurance Claim Exclusions and Claim Denials
Cybersecurity insurance companies have also increased the exclusion that could make the contract null and void. The most common reason for insurance denial include, failure to maintain security standards, regulatory fines and assessments, cyber extortion, lawsuits, and user failure. Details are listed below.
Failure to Maintain Security Standards
Every company should maintain minimum or adequate cybersecurity standards to mitigate risks. For example, quarterly preventive maintenance can actively stay on top of network and desktop monitoring, updates, patches, user safety training, antivirus, backup restore testing, and network sanitizing, to name a few. However, the best way to prevent denials is to adhere to the clauses and contract details.
Regulatory Fines & Assessments
Depending on your industry, you may be expected to follow regulated industry standards. Types of regulatory requirements include HIPAA, PCI DDS, SOX, GLBA & FERPA. However, there is a growing need for Supply Chain Risk Assessments for partners and clients or to meet state breach notification laws.
Cyber Extortion
Cybersecurity experts warn that Ransomware attacks are more sophisticated, invasive, and frequent than ever. Multiple costs arise, including extortion payments, repeat ransomware attacks by the same criminals, cost to insure affected parties, notification of all affected parties, reputation loss, client loss, operational loss, and income loss. Often, the insurance company limits the type of loss they will pay.
Lawsuits
It is not unusual for clients, partners, or affected individuals to sue the targeted company after a cyber breach. Regulatory and state breach notification laws can provide anyone a basis to sue for losses. For protection, insurance companies often include exclusions, claim specifics, policy language, industry regulations, or more to avoid paying a claim.
User Failure
Insurance companies often exclude claims that involve end-user failure. Examples include funds transferred voluntarily, fraudulent transfer by over-riding the system, fraudulent transfer by phone that limit forensic investigations, or losses of client funds.
Summary
It is crucial to understand the details of the cybersecurity insurance policy regardless of whether you are renewing your contract or obtaining a new policy. It is wise to get legal services to avoid unforeseen problems before they become an issue.
Get the Right Protection From INSI
Innovative Network Systems, Inc. (INSI) knows how to secure your information. Our highly qualified, experienced, college-educated engineers and cybersecurity specialists help you stay up-to-date on current threats, technology, and solutions. If you want a top IT support and cybersecurity company, contact us at 770-387-2424 option 2 to speak with our IT support consultants.
About INSI: The Best MSP in Atlanta!
Innovative Network Systems, Inc. has a unique approach to integrating IT support and cybersecurity. Our month-to-month programs range from basic support to proactive support, managed support, and customized support. Each program is tailored to the client’s needs and internal IT strengths.
For more information about cybersecurity dangers and the preventative measures for your company, connect with the top MSP in Atlanta; Contact INSI: 770-387-2424, option 2 or click the link below. In addition, we offer 16 different cybersecurity programs to protect you and your data.
About the Author
Deborah Frazier is the author of IT Outsourcing Secrets – A Small Business Guide to Compare IT Support Companies. With nearly 20 years of experience consulting small and medium-sized businesses on their IT support needs, she brings a wealth of knowledge to INSI as Head of Marketing and Sales. If you like this article and want to be notified when a new article is posted, click here.
