Many businesses invest in cyber insurance for peace of mind. After all, if the worst happens and you suffer a cyber attack, data breach or ransomware incident, it’s reassuring to know that help is available.
However, what some business owners don’t realise is that having a policy doesn’t automatically guarantee a payout.
As cyber threats have increased, insurers have tightened their requirements. In many cases, businesses are expected to have certain security measures in place before a claim will be considered. If those measures are missing, a claim could be delayed, reduced or even rejected altogether.
Every policy is different, but there are several controls that are becoming increasingly common requirements.
Multi-Factor Authentication adds an extra layer of protection by requiring users to verify their identity using a second method, such as a mobile app or text message.
Many insurers now expect MFA to be enabled on email accounts, cloud services and remote access systems. If an attacker gains access through a compromised password and MFA was not in place, this could raise questions during a claim investigation.
Using outdated software can leave known security vulnerabilities unpatched and exposed to attackers.
Insurers may expect businesses to keep operating systems, applications and security software up to date. Continuing to use unsupported software could increase your risk and potentially affect your cover.
Technology can only do so much. Many cyber incidents begin with a simple mistake, such as clicking on a phishing email or sharing sensitive information with the wrong person.
Regular staff awareness training helps employees recognise common threats and reduces the likelihood of an incident occurring in the first place.
A reliable backup strategy remains one of the most effective defences against ransomware and data loss.
Insurers may want reassurance that critical business data is backed up regularly and that those backups can be restored successfully if required.
Increasingly, insurers want evidence that cybersecurity is being managed properly across the business.
This may include password policies, acceptable use policies, incident response plans and procedures for handling sensitive information. These documents demonstrate that security is not being left to chance.
One of the biggest mistakes businesses make is assuming that because they have cyber insurance, they are fully protected.
The time to check your policy requirements is before an incident occurs, not afterwards. A quick review can help identify any gaps and provide confidence that your business meets the standards expected by your insurer.
Cyber insurance requirements often provide a useful benchmark for good cybersecurity practice. Even if you’re not sure what your policy requires, reviewing your security measures can highlight areas for improvement and reduce risk across the business.
Cyber insurance should be a safety net, not your first line of defence. By combining the right cover with the right security measures, businesses can put themselves in a much stronger position should the unexpected happen.