5 Reasons Companies are Denied Cybersecurity Insurance Claims

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1. Low level of cybersecurity awareness and training 

95% of security breaches are caused by human error. In cybersecurity, human error refers to anything from clicking a suspect link to inadvertently downloading malware or using weak passwords. Even with the most secure and expensive security hardware and software in place if your employees are not properly trained in security policies and procedures, your company is at risk. It is not surprising that companies with poor levels of cybersecurity awareness and training are struggling to qualify for cyber insurance. Your company must be able to prove that employees have been comprehensively trained.  

2. Weak supply chain/third party protocols 

Companies also need to be aware that the status of their supply chain line and third-party relationships are vital in their bid for cyber insurance. If a company is truly trying to protect itself from cybersecurity attacks, the level of security inside your organization will also be replicated outside of it. Cyber attackers target companies via their contractors and third-party providers to access internal systems and confidential data. If the cybersecurity of your supply chain is not up to standard, your insurance claim will not be successful. 

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3. Overlooked endpoint security 

To qualify for cyber insurance, companies must show that their security plan is holistic and with good coverage. This means implementing healthy endpoint security. Endpoint security refers to the process of protecting IoT (Internet of Things) devices such as IP cameras, VOIP phones, smart devices, desktops, laptops mobiles and tablets from cyber threats and attacks. Endpoint security software protects employees when they are connected to online networks and cloud services. If your company has not implemented smart endpoint security with subsequent incident response protocols, you will have your insurance claim denied.  

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4. No preventative security campaign or culture 

If your company has no preventative security measures in place or fails to demonstrate the existence of any security training, you will have your insurance claim denied. This does not mean your company needs to internally build a whole new security plan. You can also demonstrate preventative security measures through third-party security awareness providers and training. Once again, if you have no security plan and the related documentation in place, it simply is not worth a cyber insurance company’s time to work with your organization, as the risks far outweigh the benefits of the relationship. 

5. Inability to prove existence of a security culture 

The most frustrating reason companies are rejected by cyber insurance agencies is their inability to demonstrate that security measures are actually in place and being followed. When assessing your claim, insurance agencies will request evidence to prove that networks are sufficiently protected, and employees are aware of threats and risks in the cyber space. Unfortunately, many companies fail to do this because they are either operating internally and not aware of the ever-changing threats in the cyber space, or do not have a mechanism in place to quantify employee security awareness. Network-iQ offers comprehensive tecnhologies and expertise  to build a security culture can provide detailed assessment reports and research surveys to highlight the security strength of a workforce.