Cyber Insurance Basics: What Every Business Needs to Know
Cyber attacks rarely come with a warning, and when they hit the damage can be fast and costly. From data recovery to managing the fallout, a single breach can derail operations for days or weeks.
That is where cyber insurance can reduce the financial impact of an attack. Not all policies offer the same protection, though. What is and is not covered often depends on whether your organisation met the insurer’s security expectations before the incident. Below we explain what that means and how to prepare.
What Is Cyber Insurance and Why Does It Matter?
Cyber insurance helps businesses recover from digital threats such as data breaches and ransomware. It can fund specialist support, legal guidance and recovery work when systems are compromised and reputations are at risk.
What It May Cover
Data recovery and system restoration. Support to rebuild affected systems and restore data safely.
Legal fees and regulatory fines. Guidance and defence costs following a breach or compliance issue.
Customer notification and credit monitoring. Help to inform those affected and reduce ongoing risk.
Business interruption losses. Compensation for lost income during downtime.
Ransom payments (in some cases). Subject to policy terms and local regulations.
Buying a policy is only the first step. Maintaining strong cyber hygiene often determines whether a claim succeeds.
Why Cyber Insurance Claims Are Often Denied
A policy does not guarantee a payout. Insurers review your security controls and response efforts closely. Common pitfalls include weak controls, out-of-date or unpatched systems, missing documentation and a poor incident response. You must show that your digital house was in order before the incident occurred.
How to Strengthen Your Cyber Insurance Readiness
Align your security posture with insurer expectations. Focus on the safeguards many underwriters now require.
Strong Cybersecurity Fundamentals
Implement multi-factor authentication (MFA), reliable backups, endpoint protection and least-privilege access. The