Cyber Insurance is a smart move for any organization, but it’s essential to be aware of the fine print. One critical aspect of these policies is the exclusions they contain. In this blog post, we’ll dive into what exclusions in insurance policies mean, explore some common cyber insurance exclusions, and discuss why it’s crucial to work with an expert who knows about these limitations.
What is an Exclusion in an Insurance Policy?
An exclusion in an insurance policy refers to specific circumstances or types of losses that the policy does not cover. In other words, it’s a list of situations where the insurance provider won’t step in to offer financial assistance. These exclusions are carefully crafted to limit the insurer’s liability and protect them from certain risks. Understanding these exclusions is essential for making an informed decision about your cyber insurance coverage.
Common Cyber Insurance Exclusions
In recent years as cyber threats have adapted rapidly, insurance companies have increased the number and types of exclusions to reduce their exposure to these evolving threats. However, for businesses seeking cyber insurance coverage, this new slew of exclusions has made it increasingly challenging to secure comprehensive coverage.
Here are some common exclusions to be aware of, according to a recent survey by Delinia:
- Lack of Security Protocols: This exclusion is cited by 43% of surveyed businesses. It essentially means that if your organization lacks robust security protocols, your insurer may not cover certain cybersecurity incidents.
- Human Error: Mistakes happen, but some policies may exclude coverage for incidents caused by human error. This can include accidental data leaks or security breaches caused by employees’ actions.
- Internal Bad Actors: Cyber insurance may not cover losses resulting from malicious actions by employees or insiders within your organization.
- Acts of War or Terrorism: Cyberattacks conducted as acts of war or terrorism may not be covered by your policy, as they are often deemed as extraordinary circumstances beyond the control of insurers. In fact, it’s such a complex issue, we have a whole post on the topic here.
- Out of Compliance: If your organization is found to be out of compliance with specific security regulations or standards, your insurer might refuse coverage for any related incidents.
Don’t Leave Your Coverage to Chance
If the growing list of cyber insurance exclusions has left you wondering about your current policy’s effectiveness, reach out to us for a coverage review. Ensuring that you have coverage advice from experts who can identify and address exclusions is crucial. At eSpecialty, we specialize in cyber insurance, and we’re well-equipped to spot exclusions and ensure you’re not left exposed in the event of a cyber incident. We’re the experts so you don’t have to be!