Cyber Insurance Claim Denials On The Rise: What You Need to Know

Written By Nathan Summers

Cyberattacks are more rampant today than ever before in history, making cyber insurance an essential resource for businesses to offset the costs of potential breaches. However, did you know that nearly 44% of cyber insurance claims are denied?¹ As the number of claims continues to rise, insurance providers are implementing stricter requirements for businesses to properly test their cybersecurity solutions to ensure effectiveness. Failing to test these solutions can give insurance providers grounds to claim that the business did not meet security requirements, providing a basis to deny coverage.

Insurance companies generally require evidence that your cybersecurity solutions were tested for effectiveness prior to a breach; otherwise, they may deny the claim.

This proof must be provided; no matter how state-of-the-art, the security may be, it might still be inadequate and not be accepted.

This is where penetration testing comes in.

Penetration tests (pen tests) are dual-purpose: as both a security tool that identifies vulnerabilities before attackers exploit them and as a means of documenting compliance with security standards: Valid reasons for a business to do a pen test are:

  • Know the weaknesses in their cybersecurity protection system.

  • Channel efforts to better cybersecurity tools.

  • Stop cyberattacks and reduction of claim rejection.

What Is a Penetration Test?

A penetration test is a simulated cyberattack that is carried out to determine how susceptible your systems, networks, and even your employees might be to a real cyber-attack.

These tests target:

  • Websites: Revealing the holes in your online defense that the attackers may use to access your online account.

  • External and Internal Networks: The assessment of the perimeter as well as of the internal infrastructure of the organization.

  • Employees: Manipulative techniques such as phishing conducted through social engineering to measure people's gullibilities.

A pen test not only reveals your security countermeasures but also allows you to stay one step ahead of the attackers and comply with the requirements of both insurance companies and regulators.

How To Get Started

Start by scheduling a cybersecurity assessment or penetration test. This critical first step will help you identify vulnerabilities, prioritize improvements, and ensure your defenses meet insurance requirements. At Summers Cybersecurity, we make the process simple and effective. Contact us today to get started and take the first step toward securing your business.


(1) Source: 2023 Advisen Cyber Claims Report.

Nathan Summers