Cyber‑liability insurance used to feel like a safety net: pay the premium, file a claim, and your carrier would pick up the tab when something went wrong. But in 2024, more than four in ten claims were rejected outright. If your Baltimore‑area firm is counting on insurance to rescue you after a breach, those odds should stop you in your tracks. (Search phrase: cyber insurance claim denied)
The New Rules of the Cyber‑Insurance Game
Carriers have quietly shifted the burden of security onto the policy‑holder. Today, approval and payout hinge on provable compliance with technical controls that keep changing. The most common trip‑wires we see:
| Hot-Button Control | Typical Requirement | Why It Triggers Denials |
|---|---|---|
| Multi-Factor Authentication (2FA/MFA) | MFA on every remote access point, email, and privileged account | One missing user = "material misrepresentation" |
| Endpoint Detection & Response | 24x7 monitored EDR across servers and workstations | Lacking evidence of alerts → "failure to maintain controls" |
| Least-Privilege Access | Documented role-based permissions & quarterly reviews | Old admin rights cancel coverage |
| Continuous Vulnerability Scanning | Authenticated scans at least monthly plus quarterly penetration tests | No scan report? Coverage denied |
Addenda buried in policies now spell these out in legalese—but if you can’t produce logs or audit trails on demand, the carrier can walk away.
Application Land Mines
Underwriters treat the proposal form like a sworn affidavit. Innocent mistakes—an unchecked MFA box, inflated backup frequency—become ammunition for rescission. Courts have sided with insurers even when errors were unintentional. Translation: honesty isn’t enough; you need evidence.
Tip: Keep a snapshot of your environment the day you sign the application. If you later upgrade or change tooling, you can still prove the answers were accurate at signing.
Exclusions You Probably Missed
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Social‑engineering (BEC, invoice fraud) unless you buy a costly rider.
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State‑sponsored actors—sometimes any attack traced to a nation on OFAC lists.
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Third‑party service providers you never vetted (think niche SaaS that holds PHI).
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Failure to patch “known vulnerabilities” within a carrier‑defined timetable (often 14 days).
These carve‑outs are expanding as claims spike.
The Hidden Cost of a Denial
Beyond the headline breach cost (IBM pegs it at $4.54 million in 2024), denied coverage can:
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Invalidate contracts that require evidence of insurance.
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Jeopardize renewals—premiums jump 25‑50 % after a denial.
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Delay recovery—vendors demand upfront payment before helping.
In sectors with HIPAA, PCI‑DSS, or the SEC’s new cyber‑disclosure rules, uninsured downtime turns a security incident into a regulatory fire‑drill.
Need a reality check? Ask us for a quick denial‑risk snapshot before your next renewal.
Turning an MSP Into Your Insurance Guardian
B’more Secure IT was built for this moment. We bridge the gap between cybersecurity operations and the fine print of cyber‑liability policies.
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Insurance‑Mapped Assessments – Our onboarding checklist mirrors the questionnaires of major carriers. You see exactly which controls to fix before renewal.
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Evidence Management Guidance – We help you choose and configure practical, cost‑effective repositories for MFA logs, EDR dashboards, and vulnerability reports so that, when adjusters ask, proof is at your fingertips.
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Policy & Warranty Readiness – Considering a cyber‑warranty program? We pre‑qualify your environment so you can tap low‑friction warranties that reimburse losses within days instead of months.
Prep Steps You Can Start Today
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Run a “24‑Hour Evidence Drill.” Could you produce MFA, EDR, and backup logs from the last 30 days within 24 hours? If not, fix the logging gap.
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Review Exclusions Against Your Stack. Pay special attention to third‑party SaaS and social‑engineering caps.
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Adopt Continuous Vulnerability Management. Quarterly scans are no longer enough for most carriers.
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Document Your Patch‑Management SLA. Align it with the shortest timeframe your carrier expects.
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Book a Quick Discovery Call. Unsure where you stand? Let’s spend 15 minutes mapping your current controls and next steps—no obligation.