Cyber-crime rose last year by 11%. Clients are aware that it’s no longer a matter of if they get attacked, but when. In fact, cyber-crime is set to cost in excess of $5 trillion this year. Companies are investing an unprecedented amount in cyber insurance—$10 billion this year alone. Yet, when disaster
strikes, many of these companies won't receive a payout. Why?
Cyber liability insurance companies offer payouts that only cover 2% of the incurred damages. Because the market is still relatively new and unregulated, the risk of wide-range multiple attacks across insurance customers is high. Add to that the blurred lines between property, auto, and cyber risk, and you get insurance companies that are hesitant to deliver payouts.
Reasons Claims Are Denied
With all the risk involved in following through on payouts, cyber liability insurance companies are padding their policies with coverage exceptions. 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:
- Companies Have Poor Prevention Practices in Place
The number one reason insurance companies deny claims is the policyholder failed to comply with insurance policy data protection terms. A compliance reporting can help clients address this by coaching them to adopt compliance measures.
- Companies Fail to Document Preventative Measures
The key to ensuring insurance payouts is documentation before disaster strikes. The process of securing documentation is tedious. A compliance management solution can streamline this by automating compliance documents, screenshots, and data.
- A Third Party or Contractor Is at Fault
Ongoing assessments help identify and fix security gaps before threat actors gain a foothold.
- Accidental Errors & Omissions
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.
- Coverage Doesn’t Extend Beyond Interruption Time-frame
Cyber liability insurance plans vary and advising your clients to pay close attention to coverage time-frames could mean the difference between covering all their losses versus just a small percentage.
At Network Connections, we have resources and can help our clients through the process of securing fair payouts. Remember, compliance reporting is crucial! Most cyber liability insurance plans won’t pay out unless proper documentation of compliance effort is made available.
Reporting: Proving Prevention to Assure Payouts
The top challenge associated with cyber liability insurance payouts is proof. Delivering reports that show due care to maintain a secure environment is one way to help your
customers get paid, even after a breach.
A compliance solution, implemented by Network Connections, will provide all the necessary steps involved in compliance reporting. Start building with the existing standards and procedures to create the framework to match your policy and then augment those with any requirements that are unique to your organization’s policy terms.
This type of solution quickly reveals specific red flags that may prevent your client from getting paid in the event of a claim, and it prescribes a corrective path. Then, if you ever do have the need to make a claim, you’ll have proof of the due care necessary to compel the insurance company to pay.
Building out bulletproof evidence in your favor ahead of time will help your clients make an undeniable claim for maximum payout. Reporting, when coupled with detailed compliance, is
essential in recovering costs from an attack.
The Difference of Auditing with Automation
Every insurance company has its own set of policies, riders, contract exceptions, and fine print. By automating compliance reporting with our solution provides simplicity, dynamic worksheets, and ease of collaboration among multiple stakeholders.
With automated Compliance Management
- Top insurance company compliance templates built in
- Plug and play
- Easy to automate key functions
- Delivers reporting required for CLI claim payouts
Without automated Compliance Management
- Invest hundreds of hours manually reviewing insurance compliance requirements
- Build your own framework
- Manually conduct reporting
- Lack of essential reporting
Who is NCI and how we can help!
If you are looking for a proven IT service provider to help you Managed Cybersecurity Services, we can help. We have a team of Cyber experts that can help you through the entire process. Just as important, we can assist with automating the process of Compliance reporting and helping choose the correct Cyber Insurance Policy for your business.
Contact us today, and find out how we can help your business.