There are a number of common reasons that are causing insurers to deny coverage to a business.
While it has become clear to the majority of companies that cybersecurity insurance can provide vital protection against financial hardships caused by cybercriminals. As a result, demand for coverage has skyrocketed in recent years.
Unfortunately, many interested companies have found themselves denied coverage.
Despite increasing interest in cybersecurity insurance, the simultaneous rise in threats have forced insurers to be more hesitant to provide coverage. There are several common reasons that a business might be rejected for a policy. Some of them are within their control to change, while others are much more challenging to manage, particularly when it comes to smaller businesses.
Still, insurers are hoping that businesses will take a closer look at some of the more common reasons that they could be rejected and how they might be able to overcome those problems so that they can obtain the coverage they know they require.
The following are some of the most common reasons businesses are denied cybersecurity insurance.
- They cannot prove that they’re taking adequate security measures – Even when companies have strict security measures and preventative protocols in place, if they can’t adequately demonstrate this to their insurer, they may be denied coverage. Companies should be prepared to prove the effectiveness of their efforts.
- They lack adequate preventative security measures – Companies that haven’t implemented adequate preventative security measures in the first place will frequently be denied a policy. Taking on solid practices – which can then be demonstrated to the insurer – will help to convince the insurer that the risk associated with coverage isn’t too high.
- Weak endpoint security – Companies need to rely on more than antivirus software as the only level of prevention. It is inadequate. Endpoint security something insurers specifically look for in businesses they will cover.
- Weak supply chain security measures – The security within the company itself isn’t the only area where a vulnerability can exist to cyberattacks. Every step of the supply chain must also be solid, or a vulnerability will open at the weakest link.
- Weak training and awareness in the company – One of the most common reasons cyberattacks happen is human error. Therefore, for insurers will often deny cybersecurity insurance coverage to companies that don’t adequately train and educate their team members about proper security.