Why Cyber Liability Claims Get Denied (And How to Avoid It)
At GRIT Technologies, we know that cyber insurance is starting to feel like a must-have for most businesses. But here’s the catch: just having a policy doesn’t mean you’re covered when something goes wrong.
The truth is, many cyber liability claims never get paid. Not because the business wasn’t attacked. Not because the damage wasn’t real. But because the insurer found a reason to say “no.”
Let’s break down why that happens and what you can do to stay protected.
Most Insurance Companies Start With “No”
When a cyber incident hits and a claim gets filed, the first step many insurance companies take is to look for reasons to contest it. Their job is to pay only if every checkbox is met. If they find a missed setting, outdated policy, or a training that was skipped, that may be all it takes to deny the payout.
You might assume your coverage will kick in when you need it most. But without the right prep and documentation, the outcome can be very different.
What the Numbers Say
Here’s the reality:
- In 2022, about 30% of cyber claims were denied
- In 2023, that number jumped to 36%
- In 2024, it crossed 40%
That trend is going in the wrong direction.
Why Claims Get Denied
Here are the most common reasons insurers deny cyber liability claims:
Security controls not in place
Many policies require basic protections like multi-factor authentication (MFA), advanced endpoint protection, and regular patching. If those aren’t in place or documented, you’re at risk.
Misrepresentation on applications
If the application said you had safeguards that weren’t actually implemented, that becomes a technicality they can use to walk away from the claim.
Lack of documentation
Insurers will ask for proof. That includes logs, training records, audit reports, and incident response steps. If you can’t show it, they may assume it didn’t happen.
Policy exclusions
Some policies won’t cover certain types of attacks or third-party breaches. Others won’t cover acts of negligence. You need to know what you’re actually buying.
How GRIT Technologies Can Help
Our mission is to work with businesses that want more than just IT support. They want a partner who helps them stay protected, prove it on paper, and sleep better knowing they’re in good hands.
Here’s how we help:
Comprehensive Security Assessments
We evaluate your environment and highlight the gaps most insurers care about. We don’t just check boxes. We focus on real risks.
Implementation of Best Practices
From MFA and email filtering to advanced endpoint protection and backup validation, we help build a solid defense that matches what your policy expects.
Policy Review and Guidance
We work with your leadership team and broker to align your IT protections with the language in your policy. No guessing, no assumptions.
Documentation and Compliance Support
If a claim ever gets filed, we make sure you’re not scrambling to find proof. We help maintain logs, user training records, and incident response documentation.
Third-Party Continuous Compliance Monitoring
GRIT deploys a third-party solution that continuously audits the key components of your network. It gives us real-time visibility into gaps that could impact your claim and helps you stay compliant with the technical requirements outlined in most cyber liability policies.
Bottom Line
Insurance companies are in the business of protecting their own interests. Your job is to make sure you’ve done everything expected of you long before you ever need to file a claim.
GRIT Technologies helps you put the right protections in place and keep them there. It’s not “if” something happens, but when something happens, you need to be ready — and have the documentation to back it up.
If you’re not sure where your business stands, let’s talk.
