Cyber Insurance Basics
What Every Business Leader Needs To Know
Cyber incidents don’t just slow down your systems or threaten your data. They hit where it hurts most: your budget, your reputation, and your peace of mind. That’s why more and more business leaders are turning to cyber insurance as a safety net.
But here’s the catch: not all policies are created equal. Many look solid on paper, but when a breach happens, companies are caught off guard by denied claims or coverage gaps.
The fine print matters.
Insurance Alone Won’t Save You
It’s no longer enough to have strong IT or decent insurance coverage. You need both, working together.
Disconnected strategies often lead to denied claims or, even worse, unaddressed breaches. When your IT systems align with insurance requirements, you unlock the coverage that holds up when it matters most.
This is where your role as a leader comes in: staying aware of what’s expected and making sure your employees are on the same page.
Cyber Insurance Readiness Checklist
Here are a few common requirements that insurance companies look for:
- Multi-factor authentication (MFA) across key systems
- Regular and verified data backups
- Endpoint protection and antivirus
- Employee cybersecurity awareness training
- Documented incident response plans
- Proof of security controls (logs, reports, policies)
These aren’t just “IT’s job.” They require leadership buy-in and employee participation to work. For example, MFA only protects you if everyone actually uses it, and cybersecurity awareness only works if training is prioritized and reinforced by leadership.
What This Means for You
Cyber insurance is less about buying a policy and more about showing you’ve done the work to protect your business ahead of time. Strong IT systems and smart insurance coverage are two sides of the same coin. Together, they give you resilience and confidence when facing the unexpected.
So if you’re reviewing (or renewing) coverage this year, use the checklist above as your guide. It’s one of the simplest ways to protect your bottom line, your operations, and your reputation.
📌 Did You Know?
- 60% of small businesses in the US closed within six months of a cyber attack
- Cyber insurance claims surged 12% in 2023, with ransomware as the leading cause
- Most cyber insurance carriers now require MFA before approving coverage. The City of Hamilton, ON, had its cyber insurance claim denied explicitly due to a lack of MFA implementation, resulting in a financial loss of $18 million