5 Reasons Companies Are Denied Cybersecurity Insurance | ARIA
Cybersecurity insurance is an absolute necessity for any business operating in the modern world. However, increasing demand and threats of attacks have made insurance companies much more hesitant to offer claims. Here are some of the most common reasons claims are rejected, and how organizations can ensure they receive the coverage they need.
1. Inability to Demonstrate Proper Security Measures are in Place
Even when companies implement strong security measures and follow a strict set of preventative protocols in their operations, they often have difficulties in demonstrating this to cyber insurance agencies. Insurance agencies want to avoid paying out claims at all costs, and the most effective way to do this is by ensuring companies take all the preventative measures they can to prevent cybersecurity attacks. Insurance agencies will request evidence that demonstrates their prospective clients are sufficiently protecting their own networks before offering any type of insurance claim. However, due to the complex and ever-changing nature of cyber-attacks, companies that do not specialize in cybersecurity can struggle to prove the effectiveness of their systems without assistance from a third-party security contractor.
2. Lack of Preventative Security Measures
Perhaps the most obvious reason companies are denied cyber insurance is simply due to lack of protective cybersecurity measures. Cyber insurance agencies will not offer claims to companies that fail to protect their own network and systems because the risk far outweighs any potential benefits of working with such an organization. If a company is unable to demonstrate they have any security measures in place, provided either internally or by a third-party MSP, insurance agencies will decline their request for a claim because they are extremely vulnerable to any type of attack.
3. Inadequate Endpoint Security
Companies must focus on using a comprehensive approach to cybersecurity if they hope to get an insurance claim. Relying solely on antivirus software as the only preventative security measure is no longer a sufficient form of protection for an organization, which is reflected in insurance companies’ policies. One area that insurance agencies specifically look for is endpoint security. Lacking proper endpoint detection and response tools is one of the fastest ways for a company to get denied an insurance claim.
4. Weak Security Measures Within the Supply Chain
When a company is trying to protect against cybersecurity attacks, their network is only as strong as the weakest link in their supply chain. Due to the interconnectedness of modern technology, attackers can target outside partners and providers as a means of gaining access to an organization’s systems and data. Supply chain attacks can allow easier access to networks if the third-party organizations do not have the same level of security measures as their partners, making cyber insurance companies hesitant to offer claims to companies that work with unprotected partners.
5. Poor Internal Cybersecurity Training and Awareness
Human error is one of the most common reasons for cybersecurity attacks, acting as the main cause of 95% of breaches. Human error in the cybersecurity realm can refer to anything from inadvertently downloading malware, to not using strong passwords. A company with even the strongest and most secure forms of cyber protection cannot adequately protect against attacks if their own employees are consistently providing attackers with internal access to their network. If a company cannot demonstrate they have implemented the necessary safeguards and given their employees comprehensive training on how to prevent attacks, insurance agencies can refuse their request for a claim.
ARIA ADR was designed to allow you to address these concerns so that you can be assured of qualifying for an affordable security policy. It demonstrates that the appropriate security and preventative measures are in place. It both monitors for issues and stops attacks before significant harm occurs. Thereby providing assurance to your policy provider that their risk is minimized. Learn more
Sources:
https://www.rapidfiretools.com/blog/2020/01/07/5-ways-cyber-liability-claims-get-denied/
https://blog.usecure.io/the-role-of-human-error-in-successful-cyber-security-breaches
https://www.charlotteitsolutions.com/business-can-be-denied-cyber-insurance/
https://www.valentgroup.com/cyber-insurance-denied/
https://hbr.org/2021/01/cybersecurity-insurance-has-a-big-problem
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*** This is a Security Bloggers Network syndicated blog from ARIA Cybersecurity Blog authored by ARIA Cybersecurity Solutions. Read the original post at: https://blog.ariacybersecurity.com/blog/machine-learning-ai-in-cybersecurity-solutions