A Safety Net or a False Sense of Security?
In today’s digital world, cyber threats are a growing concern for businesses of all sizes. From ransomware attacks to data breaches, the risks are increasing, and many companies look to cyber insurance as a safety net. However, what many business owners don’t realise is that their insurance policy might not actually cover them in the event of an attack, if the right security measures aren’t already in place.
Are You Really Covered?
Cyber insurance is designed to help businesses recover from cyber-attacks, covering a number of costs, from data recovery, legal fees to reputational damage. However, just like with any other insurance, there’re countless conditions, caveats and exclusions that could leave you fronting the bill. Most cyber insurance policies will require you to have some form of basic cybersecurity defence in place before an attack otherwise they won’t pay out!
Why Cyber Insurance Claims Get Rejected
One of the most common reasons for rejected claims is a lack of fundamental security measures. Many insurers expect businesses to have multi-factor authentication (MFA) enabled, regular data backups and up-to-date antivirus software. Some policies also require staff to undergo cybersecurity training to reduce the risk of human error leading to an attack. Without these protections in place, insurers may argue that your business was negligent, making you ineligible for cover.
Another issue businesses face is failing to disclose their security practices accurately when taking out a policy. If an insurer finds that a company overstated its level of protection, for example, claiming they had encryption in place when they didn’t, this could be enough to refuse a claim. Regular IT health checks and security audits can help ensure that your business meet the necessary requirements and remains compliant with your insurer’s rules.
What Cyber Insurance Might Not Cover
Even if your claim gets approved, you may still find your cyber insurance doesn’t cover everything. Some policies exclude certain types of cyberattacks, such as social engineering scams where criminals trick employees into transferring money or revealing sensitive information. Others may only cover the immediate costs of an attack, leaving you on your own to handle long-term damage, such as reputational loss or customer compensation.
How to Ensure Your Business is Properly Protected
The first step is to review your cyber insurance policy in detail, paying close attention to any security requirements and exclusions. Investing in a strong cybersecurity strategy is just as important as having insurance. Regular updates, staff training and proactive threat monitoring can help reduce the risk of an attack and improve the chances of a successful claim if something does go wrong.
At Edmondson’s we help you to stay compliant with their insurance cover by providing expert advice and tailored cybersecurity solutions for your business. From multi-factor authentication to real-time threat detection, we ensure that companies meet insurance requirements and stay protected against evolving cyber threats. If you’re unsure whether your security measures are up to scratch, our Free IT Health Check can identify any vulnerabilities before they become costly.
Cyber insurance can be a valuable safety net, but it’s not a substitute for strong security. The best way to protect your business is to take proactive steps now, before it’s too late. Don’t wait until an attack happens to find out you’re not covered. Strengthen your cybersecurity today and ensure that your business is fully protected.
