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Cyber Security Policies

What is the world’s number one asset? Yes, it’s data.  In today’s digital landscape, businesses of all sizes rely heavily on technology to streamline operations, enhance efficiency and very much dependent on data. However, this increased reliance on digital infrastructure also exposes companies to the ever-growing threat of cyberattacks.  I have met a lot of businesses from solo-prenuers and SMBs and I can say with certainty that if I had to guess, 95% of them do not know their security posture.  Common things I hear is that:

  • ‘My IT company is responsible for my data security’.
  • ‘It’s just me in my company, no-one will attack me’.
  • ‘It’s never going to happen’.

These are completely false beliefs. I have spent a lot of time working with different companies, where they have had a breach, and now the business takes data security seriously.  More importantly, insurers see this day in/day out, so insurers understand the potential financial repercussions of cyber incidents and have responded by offering cyber insurance coverage to offer some help for organisations to mitigate these risks. Nevertheless, companies that lack robust data security measures and cyber security measures often face significant challenges in obtaining adequate insurance coverage. In this article, we discuss how the absence of cybersecurity impacts companies’ ability to secure money from insurers.

Risk Assessment and Underwriting

When businesses seek cyber insurance coverage, insurers do not know their client operations. Insurers ask some questions to help determine the level of exposure to cyber threats. Organisations with weak or inadequate cybersecurity measures are perceived as high-risk clients, making them less attractive to insurers. As a result, insurers may either limited coverage at significantly higher premiums, or worse refuse coverage completely. Without a strong cybersecurity foundation, organisations may struggle to meet the risk criteria set by insurers, hindering their ability to obtain comprehensive coverage.

Limited Coverage Options

Insurers tailor cyber insurance policies based on the specific risks faced by an organisation. Businesses with robust cybersecurity frameworks can access a broader range of coverage options, including protection against data breaches, ransomware, business interruption, and legal liabilities. Conversely, companies lacking robust cybersecurity measures might only qualify for minimal coverage, leaving them exposed to substantial financial losses in the event of a cyber incident.

Higher Premiums and Deductibles

Companies with a history of cyber incidents or inadequate cybersecurity measures are considered higher-risk clients. Consequently, insurers often charge higher premiums and require higher deductibles to cover the increased level of risk. For some businesses, the cost of cyber insurance may become prohibitive, leading them to consider operating without coverage altogether. This choice leaves them vulnerable to potentially devastating financial consequences resulting from cyberattacks.

Exclusions and Limitations

Insurers may include various exclusions and limitations in cyber insurance policies for companies that lack robust cybersecurity. These exclusions may encompass specific types of cyber incidents or specific parts of a company’s digital infrastructure that are deemed vulnerable. As a result, businesses may not be adequately protected from some of the most prevalent and damaging cyber threats.

Difficulty in Obtaining Claims

When companies with insufficient cybersecurity measures experience a cyber incident, they may encounter challenges when filing insurance claims. Insurers may investigate whether the incident was a result of negligence or lack of due diligence on the part of the insured. If the company is found to have failed to implement adequate cybersecurity measures, the insurer may deny the claim, leaving the company to bear the financial burden alone. 

Reputational Implications

A company’s ability to secure insurance coverage can also impact its reputation. Partners, clients, and stakeholders often view a company’s approach to risk management as a reflection of its overall business competence. A lack of adequate cybersecurity measures can raise doubts about the company’s commitment to safeguarding sensitive data, potentially eroding trust among customers and partners.

   ‘The Bigger You Are…’


Cyber insurance may not be appropriate for everyone.  However, the more data you have, and the more dependent you are on digital technologies to process that data, the higher the chance you will need to get some form of cyber insurance cover.  I am sure you have heard the phrase, ‘The bigger you are, the harder you will fall’.  In the age of digital connectivity, cyber threats pose an increasingly significant risk to businesses worldwide. Companies seeking to secure insurance coverage must prioritise robust cybersecurity measures to demonstrate their commitment to risk management. Although the questions on the insurer form are lightweight, insurers err on the side of caution and are vigilant in assessing a company’s cyber risk profile, and those with inadequate cybersecurity measures face challenges in obtaining comprehensive coverage at affordable rates.  If your organisation has in the past through ‘It’s OK, I’ll just tick ‘Yes’ to the boxes’, your organisation needs to understand this is not a tick box exercise – you are likely to get caught out:

  • First, if you are not able to show you have maintained your security controls, you may be unable to make a claim.
  • Secondly, lying or being in denial about knowing your state of security puts you at risk of an attack. Saying you are ‘compliant’ when you are not, is worse than stating you are not compliant. I have seen this too many times. When you are caught out, this can have a very negative impact.

By investing in cybersecurity and adopting best practices, businesses can not only enhance their chances of obtaining appropriate insurance coverage but also strengthen their resilience against cyber threats, safeguarding their financial stability and reputation in an ever-evolving digital landscape.

If you have not already, get started to know your security posture by undertaking a security healthcheck.  This will help your organisation aim to work towards appropriate measures, and also help you work towards getting appropriate cyber insurance cover.

Be Secure

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