Insurers are cracking down on payouts. Learn what steps you need in place to ensure your policy actually protects you.
Cyber insurance used to feel like a safety net — something you could count on if the worst happened. But lately, business leaders are learning the hard way: if you don’t have certain protections and plans in place, that policy may not pay out at all.
Cyber insurance isn’t going away — but insurers are demanding more. And one of the key requirements? A documented, tested business continuity plan.
Why Cyber Insurance Alone Isn’t Enough Anymore
The cyberattack landscape has evolved. Insurers have seen rising claim volumes and losses from incidents like:
- Ransomware attacks
- Insider data breaches
- Email compromise schemes
- Server takeovers and outages
In response, many have tightened their underwriting standards. Today, most policies require proof of proactive security measures — not just a signature.
This means your cyber insurance is now contingent on what you’re doing before the breach happens. If you can’t show adequate planning, recovery readiness, and employee protocols, you could be left footing the bill.
What Insurers Are Looking For
Every policy is different, but most carriers now expect the following baseline safeguards to be in place:
✅ Multi-factor authentication (MFA)
✅ Regular backups with secure, off-site storage
✅ Employee cybersecurity training
✅ Incident response plan
✅ Business continuity plan and testing
✅ Documentation of compliance efforts (HIPAA, PCI DSS, FTC Safeguards, etc.)
Without these, insurers may:
- Deny claims entirely
- Limit coverage or payout
- Raise your premiums
- Cancel your policy after a claim
It’s not about checking boxes. It’s about demonstrating that you’ve taken data security and business resilience seriously.
What a Business Continuity Plan Has to Do with It
Your business continuity plan is your proof of preparedness. It shows that, in the event of a breach or outage, your business has a:
- Clear recovery process
- Communication plan for staff and clients
- Backup and restore procedures
- Team trained on how to respond
- Strategy to minimise disruption
When an incident occurs, the plan gives your insurer confidence that:
- You’ll reduce damages quickly
- You won’t inflate the loss by scrambling blindly
- You’re a lower-risk client in the long term
A Real-World Example
A small firm was hit with a ransomware attack. They had cyber insurance — but hadn’t updated their backups in months, and had no written plan in place.
The insurer reduced their payout by 60%, citing “preventable exposure.” Worse, it took the business over 2 weeks to recover systems, costing them lost contracts and customer trust.
The fix would’ve cost a fraction of the loss — and it’s one many businesses still overlook.
Don’t Wait for a Denied Claim to Take Action
If you’ve already invested in a cyber insurance policy, you want it to work when you need it. That means pairing your coverage with a clear, documented plan that shows you’ve done your part.
Final Thought: Insurance Is a Partnership, Not a Shortcut
Your cyber insurer is there to help — but only if you’ve upheld your end of the deal.
A tested business continuity plan could be the difference between a smooth recovery and a financial disaster.
Want help creating or updating your plan?
Schedule a Business Continuity & Compliance Review with BizCom Global and make sure your policy protects you when it matters most.
