The $500,000 Wake-Up Call Every CEO Should Hear
When assumptions meet accountability, clarity matters.
A few years ago, a business owner told me something I’ll never forget.
He said, “Mike, the scariest part wasn’t the ransomware. It was watching everyone point fingers afterward. IT blamed the vendor. The vendor blamed the insurer. And the insurer blamed the contract.”
Then he said, “I thought we were covered.”
That sentence has been burned into my memory because I’ve heard it too many times since. And now, a real-world case shows just how expensive that false sense of security can be.
When the Insurer Turns the Tables
In September, Ace American Insurance (Chubb) filed a lawsuit against two cybersecurity vendors, Congruity 360 and Trustwave, after paying $500,000 to their insured, CoWorx Staffing Services, for a ransomware claim.
Ace did not sue CoWorx. They sued the vendors CoWorx hired to protect them.
According to the complaint, Congruity allegedly failed to implement multifactor authentication and secure servers properly. Trustwave, which provided security monitoring, allegedly delayed notifying CoWorx once the attack started.
Ace paid the claim and then filed suit, claiming negligence and breach of contract to recover the $500,000.
This is not speculation. The case was filed on September 15, 2025, in the District of New Jersey and reported by Hunton Andrews Kurth LLP in their Privacy and Information Security Law Blog on October 13, 2025. You can read their full summary here: 👉 Cyber Insurer Sues Policyholder’s Cyber Pros (Hunton Andrews Kurth, Oct. 13, 2025)
The Fine Print Nobody Reads
If you have ever reviewed an IT or cybersecurity contract, you already know how the story goes. No warranty. No guarantee. No liability beyond the cost of the service.
It’s the fine print that turns protection into a shrug.
It reminds me of hiring a security guard who leaves the front door wide open, then points to the contract and says, “Technically, I only guard the lobby.”
It sounds ridiculous, yet this happens every week inside companies that assume they are covered.
Why This Case Should Make Every Buyer and Seller Pay Attention
This lawsuit isn’t just an insurance story. It’s a story about responsibility.
Imagine your company is in the middle of a sale or acquisition. A buyer is reviewing your contracts and vendor agreements when your insurer files a lawsuit against one of your providers. Or imagine a ransomware event surfaces during due diligence.
The buyer doesn’t care who is at fault. They care that it happened. They care that you can’t prove what was protected or patched.
Deals don’t fall apart because of incidents. They fall apart because of uncertainty.
That’s the quiet message in this lawsuit. It is not only about liability in contracts. It is about trust, value, and proof.
The Ordinary Things That Cause Extraordinary Problems
At NCX Group, we have said it for years. Be brilliant at the ordinary.
Cybersecurity failures rarely come from the extraordinary. They come from the ordinary work that gets ignored. The missing MFA. The delayed patch. The vendor who never followed through on an alert.
Those ordinary things create extraordinary costs.
This case is not about a sophisticated breach. It is about skipped steps that were as basic as brushing your teeth. You can buy the most expensive toothpaste in the world, but if you never use it, you still end up at the dentist.
Proof, Not Perception
Our second philosophy at NCX Group applies here just as much. Cybersecurity isn’t about what you think or feel. It’s about what you can prove.
When a breach happens or a buyer starts due diligence, feelings do not hold up. Proof does.
Proof that MFA was enforced. Proof that your vendors were monitored. Proof that your response plan worked. Proof that your contracts put accountability where it belongs.
Because in business, proof protects more than data. It protects trust, valuation, and continuity.
The Bigger Picture
Whether you are buying, selling, or just running a company, this case is a reminder that real cybersecurity is not a checkbox.
It is not about paperwork. It is about performance. It is about being able to prove that your protection works when the lights flicker and the lawyers start asking questions.
Be brilliant at the ordinary. Prove what you do. That is how you protect your business, your reputation, and your value.
P.S. If you are preparing for a transaction or want to make sure your protection is more than a promise on paper, let’s talk before the next crisis decides for you.
Schedule a conversation here: https://calendly.com/ncxgroup/linkedin-meet-and-greet
Byline Mike Fitzpatrick Founder & CEO, NCX Group, Inc. Cyber Risk Simplified. Business Protected. Value Proven. 🌐 www.ncxgroup.com 🔗 LinkedIn | NCX Group LinkedIn Page
Repost from LinkedIn – https://www.linkedin.com/pulse/500000-wake-up-call-every-ceo-should-hear-mike-fitzpatrick-nw4nf/
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