The Rise of Investment in
Cyber Liability Insurance
Reasons Claims Are Denied
With all the risk involved in following through on payouts, cyber liability insurance companies are padding their policies with coverage
Advise your customers to watch out for legalese that’s designed to minimize payouts and boost the loss ratio. The loss ratio is the ratio of premiums to payouts—the profit motive driving cyber liability insurers.
Helping clients receive a fair payout requires education, preparation, and documentation. It all starts with raising your clients’ awareness about the risk of lower payouts and putting plans in place to mitigate that risk.
The Top 5 Reasons Cyber Liability Companies Deny Claims:
1. Companies Have Poor Prevention Practices in Place
2. Companies Fail to Document Preventative Measures
3. A Third Party or Contractor Is at Fault
4. Accidental Errors & Omissions
5. Coverage Doesn’t Extend Beyond Interruption Timeframe
The number one reason insurance companies deny claims is the policyholder failed
to comply with insurance policy data protection terms. MSPs can help clients
address this by coaching them to adopt compliance measures.
The key to ensuring insurance payouts is documentation before disaster strikes. The process of securing documentation is tedious. A compliance solution like Compliance Manager GRC can streamline this by automating compliance documents, screenshots, and data.
Ongoing assessments help identify and fix security gaps before threat actors gain a foothold.
By processing information and data in detailed reporting, clients can tell their
story to their insurance carrier coherently. You can use compliance software
to supply and record accurate data in advance. That way, if a cybersecurity
disaster occurs, providing compliance documentation becomes much easier.
This is an opportunity to educate your clients on contracts and provide added value for
them. Cyber liability insurance plans vary and advising your clients to pay close
attention to coverage timeframes could mean the difference between covering all their
losses versus just a small percentage.