Introduction to cyber insurance
Cyber insurance application red flags
"Always consult your IT department when completing a cyber application," she added. "Some questions can be confusing, and if your answer is misstated, it could lead to your application being declined."1. Data encryption
Insurers are likely to be wary of businesses that don't have a formal incident response plan in place. This may indicate a lack of preparedness for a cyberattack or data breach, which could make the business more vulnerable to attacks, Fear said.
If your organization doesn't have an incident response plan, consider developing one before applying for cyber insurance.
6. Recovery time objective
Business interruption costs can add up quickly if critical systems remain down for an elongated period. Fear said organizations should strive to recover critical systems, applications, and processes in less than three days.
Any recovery timeline beyond three days could put your organization's cyber insurance application at risk.
7. Previous cyber incidents
If your organization has experienced previous cyber incidents or data breaches, this may raise concerns for insurers.
It's important to be transparent about any previous incidents, but also to show that steps have been taken to address the issues and prevent them from happening again, Fear explained.
8. Incomplete or inaccurate information
As one might expect, providing incomplete or inaccurate information on a cyber insurance application can raise red flags for insurers. It's important to be as thorough and accurate as possible when filling out the application, and to ensure that all information is up-to-date.
If it comes to light that information provided in an application is false, it could lead to the claim being denied, Fear said.
9. Lack of employee training
Insurers may also be concerned about businesses that don't provide regular cybersecurity training for their employees. Without proper training, employees may be more susceptible to phishing scams and other cyberattacks, which could put the organization at risk.
10. Use of outdated software
Using outdated software or failing to apply software patches in a timely manner can also be a red flag for insurers. Outdated software may have vulnerabilities that hackers can exploit, which could lead to a data breach or other cyber incident.
11. Poor password management
Finally, poor password management can also be a red flag for insurers. Using weak or easily guessable passwords, sharing passwords, or failing to change passwords regularly can all increase the risk of a cyber incident.