Cyber insurance can be voided after a claim if your controls did not match your application.
Why this matters
Cyber insurance applications now ask detailed questions about your security controls, and those answers are legally binding. The most common problem is not fraud. It is confusion. MFA was turned on for some accounts, not all. Backups were running, but no one tested a restore. The application asked if the control was in place, and the person who signed believed the answer was yes. A 2022 court case voided a policy entirely after a ransomware claim because MFA had been stated as active but was not implemented across the systems that were actually attacked.
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82%
Share of small businesses without any dedicated cyber insurance policy
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In 2022, a court declared a cyber insurance policy null and void from its inception after the company suffered ransomware. The insured had claimed MFA was in use, but it was only active on the firewall, not the targeted servers.
A documented case of policy rescission over a misrepresented control
Source: Travelers v. International Control Services, U.S. District Court, Central District of Illinois, 2022
Free Checklist for Hampton Roads Small Businesses
The Cyber Insurance Readiness Checklist
Before you sign the renewal, make sure your controls and your application actually match.
What you get
- The controls insurers now require to issue or renew a policy
- How to keep your application honest (the Travelers v. ICS lesson)
- The documentation an insurer asks for at claim time
- Coverage basics most owners have not read carefully
- A pre-renewal gap check you can run today
Preview
- The controls insurers now require before they will issue or renew
- What to verify before signing the application
- The documentation an insurer or forensics team will ask for
- Coverage basics most business owners have not read carefully
- A pre-renewal gap check you can run today
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