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Understanding the critical vulnerability exclusion in a cyber insurance policy

Updated: Jun 7

As a business owner, you may opt for Cyber Insurance.  Navigating the finer details is crucial for protecting your organisation and one aspect of these policies is the Critical Vulnerability Exclusion.

Let’s look at the implications for your business, and how achieving Cyber Essentials, can help mitigate some of those associated risks.

What is the Critical Vulnerability Exclusion?

The #CriticalVulnerabilityExclusion is a standard clause in many cyber insurance policies that can affect your coverage.

An insurer may not cover any legal liability or losses from an incident if it exploits a critical vulnerability in your computer equipment. An exclusion usually applies if a patch or fix was available for a specific period before the incident that was not applied to your system.

Why should you be concerned?

This clause places the onus on you to ensure your systems are updated. Failing to apply patches for critical vulnerabilities within a set time of their availability, means your insurance will not cover any resulting losses from an attack exploiting those vulnerabilities.  Non-compliance with this clause can result in unexpected financial losses, by assuming you were covered as recovering from a #CyberAttack can be costly and very time-consuming.


A Practical Comparison: The Broken Door Lock

Imagine the lock on your office door is broken, leaving it vulnerable to burglars.  Would you fix the lock immediately?

Most likely, you would repair it soonest, or put something else in place until it is fixed, and usually, this would all be within 14 days to ensure the security of your office.

Would you leave it unrepaired hoping no one notices? A risky gamble, the longer the lock remains broken, the higher the chance of a break-in.

Similarly, in the digital realm, failing to patch critical vulnerabilities is akin to leaving your office door wide open. Just as you would prioritise fixing a physical security issue, you should also prioritise addressing cyber security vulnerabilities promptly.

How Cyber Essentials Can Help?

Achieving #CyberEssentials offers numerous benefits that can help mitigate the risks associated with the Critical Vulnerability Exclusion.  Cyber Essentials provides a clear framework for securing your IT systems against common threats. This includes ensuring that critical patches are applied promptly, reducing the risk of vulnerabilities being exploited.

By adhering to the Cyber Essentials guidelines, you demonstrate a commitment to maintaining robust #CyberSecurity practices. This can reassure insurers and may even lead to more favourable policy terms.

Certification can enhance your business’s reputation by showing customers and partners that you take cyber security seriously. This can be a valuable differentiator in a competitive market.

Practical Steps for UK Business Owners

Start by working towards Cyber Essentials certification, as it involves implementing basic cyber security measures that protect against common threats.

Ensure you have a reliable system for identifying and applying patches. Automate this process as much as possible to reduce the risk of human error.

Conduct regular audits to ensure patches are applied and that no vulnerabilities are overlooked. This proactive approach can help maintain the security of your systems.

Discuss your #CyberInsurance policy with your insurer to understand all exclusions and explore options for additional coverage if necessary. Achieving Cyber Essentials may help you negotiate better terms.

The National Cyber Security Centre, recently published, “Gaining a Cyber Essentials certificate is a major step in making organisations more resilient. Those who have done so are 92% less likely to make an insurance claim. Nevertheless, cyber insurance is an added incentive for organisations to implement security controls and resilience measures.” 

Understanding your systems is a crucial step for modern business owners. Just as you wouldn't leave a broken door lock unattended, you shouldn't ignore cyber security.  You can protect your business from the financial impacts of fraud and cyber-attacks and ensure continued growth and success in today’s digital landscape.


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