What's Not Covered by Cyber Insurance in Georgia?

Cyber insurance has become a must-have for small and mid-sized businesses in Georgia, as cyber threats continue to rise. But while having a policy can offer peace of mind, not all cyber insurance coverage is created equal. Many business owners only realize their policy has critical exclusions after it's too late. Understanding what’s not covered is just as important as knowing what is.

Why Cyber Insurance is Essential for Small Businesses

Small businesses are prime targets for cybercriminals because they often lack the robust security measures of larger corporations. Cyber attacks such as ransomware, social engineering fraud, and data breaches can lead to devastating financial losses. While cyber liability insurance can provide critical protection, policyholders need to be aware of common exclusions that could leave their business vulnerable.

Common Cyber Insurance Exclusions to Watch For

1. Social Engineering and Funds Transfer Fraud

One of the most common cyber threats is social engineering, where hackers trick employees into transferring funds to fraudulent accounts. Many business owners assume their cyber insurance policy will cover these losses, only to find out that funds transfer fraud is often excluded or requires a separate endorsement.

How to Protect Your Business: Look for policies that specifically include social engineering fraud coverage and implement a strict callback verification process before authorizing payments.

2. Lack of Multi-Factor Authentication (MFA)

Multi-Factor Authentication (MFA) is a crucial security measure that prevents unauthorized access to accounts and systems. Many insurance carriers now require businesses to have MFA enabled on key systems—such as email and financial accounts—before covering losses related to hacking or phishing attacks.

How to Protect Your Business: Ensure that all employees use MFA for company accounts, especially email and banking logins. If your policy requires MFA and you don’t have it in place, your claim could be denied.

3. Failure to Report Cyber Incidents in a Timely Manner

Many cyber insurance policies require businesses to report cyber incidents within a specific timeframe—sometimes as little as 48 hours. If a business delays reporting a breach, ransomware attack, or phishing attempt, the claim may be denied.

How to Protect Your Business: Establish a clear cyber incident response plan that includes immediate reporting to your insurer. Assign a team member to monitor and report potential security breaches.

4. Acts of War or Nation-State Attacks

Certain cyber attacks—especially those linked to foreign governments—may not be covered under standard cyber insurance policies. Some insurers classify state-sponsored cyberattacks as an "act of war" and exclude coverage.

How to Protect Your Business: While it’s difficult to predict nation-state attacks, working with an experienced broker can help you find policies with more inclusive coverage for cyber incidents.

5. Data Breaches Due to Employee Negligence

If an employee’s careless actions—such as sharing passwords, using weak credentials, or falling for a phishing scam—lead to a data breach, some insurers may deny coverage, citing negligence.

How to Protect Your Business: Provide regular cybersecurity training for employees and enforce strict password policies. Educating employees can reduce the risk of human error leading to an uncovered breach.

6. Loss of Future Revenue Due to a Cyberattack

Cyber incidents often disrupt business operations for weeks or months, leading to significant revenue losses. However, many cyber insurance policies don’t cover lost profits—only the immediate costs of responding to an attack.

How to Protect Your Business: Consider business interruption coverage or a policy that includes financial losses due to prolonged downtime.

How to Choose the Right Cyber Insurance Policy

Given these exclusions, it’s critical to carefully review any cyber insurance policy before purchasing. Here’s what you can do to ensure your business is fully protected:

• Work with a knowledgeable broker: A cyber insurance expert can help you navigate policy exclusions and secure comprehensive coverage.
• Request a detailed policy review: Ask for clarification on what is and isn’t covered, and negotiate additional coverage if needed.
• Invest in cybersecurity best practices: Many insurers offer better coverage or lower premiums to businesses with strong security measures in place.

Why BIS Benefits is the Right Broker for Your Business

At BIS Benefits, we help businesses in Georgia find the right cyber insurance coverage without the hidden exclusions that can leave you exposed. Here’s how we stand out:

• Expert policy analysis: We ensure that your policy includes necessary protections like social engineering fraud and business interruption coverage.
• Tailored solutions for various industries: Whether you’re in technology or digital marketing, we find coverage that meets your industry-specific needs.
• Ongoing cybersecurity support: We offer resources and strategies to help prevent cyber incidents before they happen.

Cyber insurance is an essential safeguard for businesses, but not all policies provide the same level of protection. By understanding common exclusions and taking proactive security measures, business owners can reduce risk and avoid costly coverage gaps.

If you’re unsure whether your current policy provides adequate protection, schedule a free cyber insurance consultation with BIS Benefits today. Let us help you secure the right coverage before it’s too late!