Cyberattacks are a continuous concern in the technology industry. As a business owner, your company’s security is paramount. Securing cyber insurance can help you recover losses caused by a cyberattack or data breach. But what happens when your insurer denies your claim after experiencing an attack?
Denial of insurance claims can happen for various reasons. Understanding what these are can help you form an appeal for reconsideration.
Non-compliance with policy terms
Insurers can require strict adherence to conditions outlined in your policy, which can include:
- Maintaining up-to-date security measures
- Training employees about cybersecurity
- Mitigating the incident properly with appropriate protocols
Failure to follow these orders can lead to a denial.
Policy exclusions
Your policy has specific limits and exclusions that insurers communicate before an agreement. This means that your insurance coverage may exclude certain types of incidents. If your company’s cyberattack experience falls under this exclusion, an insurer can deny your claim.
Failure to follow reporting deadlines
If your insurance coverage follows a “claims made and reported” basis, you can only file a claim and report the incident within the policy period. Missing this deadline can be grounds for denial.
Lack of evidence
When filing a cyber insurance claim, you must provide the following:
- Detailed breakdowns of the incident
- Reports from a digital investigator
- Communication records
- Remediation costs and invoices
- Pieces of evidence that prove the existence of an incident
- Completed claim forms
A lack of sufficient documentation can result in a denial.
Actions to take when an insurer denies your claim
Forming an appeal can be your next step, but this process can be overwhelming. If you are unsure how to proceed, consider seeking legal counsel from an attorney who has experience in insurance recovery cases. They can help you understand your rights and offer clarity on concerns regarding denied cyber insurance claims.