Cyber Insurance Won’t Cover You Without Good Cyber Hygiene
In today's threat-heavy digital landscape, small and mid-sized businesses (SMBs) are beginning to recognize that cybersecurity is not just an IT problem — it's a business survival issue. In response, many are turning to cyber insurance policies to help offset the financial risks of a breach.
That’s a smart move. But here’s the truth most providers won’t tell you upfront:
Cyber insurance won’t protect you from an attack — and it won’t pay out if you can’t prove you did your part to prevent it.
This creates a dangerous false sense of security: business leaders often assume that once they’ve purchased cyber insurance, they’re covered and can move on.
In this article, we’ll explain:
What cyber insurance is and what it actually covers
Why insurance isn’t a replacement for proactive cybersecurity
What insurers now require to approve or even issue claims
How poor cyber hygiene can void your coverage
And how CyberPIG helps SMBs reduce risk and meet security standards
🛡️ What Is Cyber Insurance, Really?
Cyber insurance — also known as cyber liability insurance — is designed to help businesses recover from the financial consequences of a cyberattack. This includes coverage for:
Data breach response costs (notification, legal fees, credit monitoring)
Ransomware payments
Business interruption losses
System damage and restoration
Regulatory fines or penalties (depending on your region)
For many SMBs, this sounds like a safety net — and it is. But just like home or car insurance, cyber insurance doesn't prevent incidents. And just like any insurer, your cyber insurance provider expects you to take reasonable steps to minimize risk.
🧯 Insurance is Not a Fire Extinguisher
Imagine leaving your home unlocked, with candles burning, and going on holiday. Then imagine trying to claim insurance when the house burns down or is robbed.
That's how cyber insurance underwriters increasingly view poor cybersecurity practices.
If you're not locking your digital doors and windows, you're not just vulnerable — you're potentially uninsurable.
🧩 The Myth of “Set It and Forget It”
The biggest problem with cyber insurance is the false sense of security it creates.
Too often, we hear things like:
“We’re covered, so we’re not worried.”
“We’ll deal with a breach if and when it happens.”
“Insurance will pay for everything.”
Unfortunately, those beliefs can be devastating.
Here’s why.
🔎 What Most Policies Don’t Tell You (Until It’s Too Late)
1. Insurers Are Getting Stricter
Cyber insurers have taken massive financial hits over the last few years due to surging ransomware and phishing attacks. As a result, they’re no longer handing out policies without asking tough questions.
Most now require you to meet certain minimum security standards, including:
Multi-factor authentication (MFA)
Endpoint detection & response (EDR)
Regular software patching
Employee cyber awareness training
Data encryption
Incident response plans
If you don’t meet these — or can’t prove you did — your claim may be denied.
2. Coverage Gaps Are Common
Even with a robust policy, not everything is covered. For example:
Reputational damage isn’t always included.
Loss of customers due to a breach may not be recoverable.
Third-party liability can fall outside your policy.
Acts of negligence (like ignoring a known vulnerability) often void claims.
This is especially dangerous for SMBs, where every pound counts.
🧼 What Is "Poor Cyber Hygiene"?
Cyber hygiene refers to the routine steps your organization takes to maintain security and reduce risk.
Examples of poor hygiene:
Using weak or reused passwords
Ignoring software updates and patches
No phishing awareness training
No incident response or backup plan
Over-permissive user access rights
Not using MFA for email or admin portals
If your company gets breached and it’s clear these basics weren’t followed, you may be left paying out-of-pocket — even if you’re insured.
📉 Real-World Examples: When Insurance Failed
Example 1: The Phished CEO
An SMB CEO clicked on a spoofed DocuSign email while traveling. Credentials were stolen, and hackers used their account to request a fraudulent wire transfer. The finance team sent £20,000 to the attacker.
The catch? There was no MFA on the CEO’s email account, even though the company claimed it was in place.
👉 Result: Insurance denied the claim due to a “failure to implement basic controls.”
Example 2: The Missed Patch
A regional retail business suffered a ransomware attack that exploited an unpatched firewall vulnerability — one that had a fix available for months.
The aftermath: $85,000 in damages.
But the insurer only paid $20,000 because the business couldn’t demonstrate it had an active patch management policy.
👉 Lesson: Outdated systems = reduced coverage.
🧠 Prevention Is Still Your Best Investment
Let’s be clear: Cyber insurance is a good idea. It should absolutely be part of your risk management strategy.
But it's not a strategy on its own.
Here’s what a layered, proactive defense looks like:
✅ 1. Security Awareness Training
Humans are the weakest link in most attacks. Training your team to:
Recognize phishing attempts
Practice strong password hygiene
Report suspicious activity
...can stop threats before they become disasters.
At CyberPIG, we provide ongoing, gamified training that employees actually remember — not boring slide decks.
✅ 2. Endpoint Protection & Monitoring
Modern threats don’t just rely on emails. Attackers exploit vulnerabilities in your endpoints — laptops, desktops, mobile devices.
You need:
Antivirus + anti-malware tools
Threat detection and alerting
Remote wipe capabilities
Our managed services include 24/7 endpoint monitoring to keep your devices clean and under control.
✅ 3. Access Control & MFA
Every account — especially those with admin access — should be protected with multi-factor authentication.
We help SMBs:
Identify risky accounts
Enforce least-privilege access
Set up MFA across critical services
✅ 4. Patch & Update Management
Outdated systems are a goldmine for attackers. They often scan the internet for businesses running unpatched software — and when they find you, it’s game over.
CyberPIG helps automate patching schedules and ensures critical updates don’t fall through the cracks.
✅ 5. Incident Response Planning
If something goes wrong (and it might), your ability to respond quickly is everything.
CyberPIG helps you:
Develop a clear, step-by-step response plan
Assign roles for decision-making and communication
Conduct simulated incident drills
Document everything (for insurers!)
✅ 6. Cyber Insurance Readiness Support
We don’t sell insurance, but we make sure you meet the standards your insurer expects.
Our team can:
Conduct pre-policy audits
Help you document controls and policies
Assist in security questionnaires
Provide insurer-friendly reporting and dashboards
👉 This dramatically increases the chances your claims will be approved — if and when you need them.
📣 Why This Matters for SMBs
You don’t have the budget or resources of an enterprise. That means:
Every incident is more damaging
Every pound matters
Every customer relationship is critical
Cyber insurance is a financial cushion — but cybersecurity is your front line.
🐷 How CyberPIG Can Help
CyberPIG was built to help businesses just like yours. Our mission is to make enterprise-grade security accessible to SMBs — without the jargon, the red tape, or the corporate price tags.
We offer:
Engaging, effective cyber awareness training
Proactive vulnerability management
Managed detection and response services
Support for cyber insurance compliance
A growing library of plug-and-play policies, guides, and checklists
Whether you're starting from scratch or tightening up before your next policy renewal, we can help.
✋ Don’t Wait for a Breach to Take Cyber Seriously
“You don’t buy car insurance so you can drive recklessly.
You don’t buy cyber insurance so you can ignore security.”
Get ahead of the risks. Invest in prevention. Train your people. Lock your systems. And then — only then — rest easy knowing your insurance is a backstop, not your first line of defense.
Ready to upgrade your cyber hygiene?
Let’s talk. 🐷 👉 Book your free consultation today!
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