True or false? Cyber claims are getting denied due to incorrect insurance applications

"Claims get denied because of a lie on the application"

Unfortunately the insurance industry is preying on fear going into the busiest renewal period of the year. We received a copy of an email that went out to a bunch of MSPs trying to scare them.

The Beltex team still has not seen that happen except in the news (and reporters are not excited to write "yet another cyber claim successfully paid out!) but we decided to do some casual research.

After talking to multiple carriers, outside counsels, and incident responders, our informal results are in: this is an extremely (extremely) rare occurrence.

https://www.cfc.com/ is a major cyber insurance carrier and publicly stated they paid out 99% of claims *in full* for 2024.

Another $40b+ carrier told us they did not deny a single cyber claim this year.

Joseph Brunsman is one of the smartest people in the MSP insurance space and shared a great study on the topic: "Material Misrepresentations in Insurance Litigation: An Analysis of Insureds’ Arguments and Court Decisions" - a key takeaway: the bar is extremely high and requires clear *intent* to deceive.

What should you ACTUALLY be worried about? The majority of denied/limited claims our team sees are from lack of coverage. Trying to claim a ransomware attack on a general liability policy (that is what you Tech E&O is for!) or limits of coverage inside the policy itself. Going into renewal time make sure you understand your real world risk - the coverage your policy provides.

Check out our quick primer on what policies cover and what you need here.