Cyber Insurance Protection Pitfalls – Unscripted With SST Episode Nine

Cyber Insurance: Protection or False Sense of Security?

In this episode of Unscripted with SST, the team takes a closer look at cyber insurance. What it is, why it matters, and how businesses can fall into the trap of assuming they are protected when they actually are not. SST COO Beau Elston walks through the critical disconnect between having a cyber policy and being truly covered.

What Cyber Insurance Is (and Isn’t)

Cyber insurance is designed to offset the financial fallout from incidents like ransomware attacks, data breaches, or business email compromise. But having a policy in place is not enough. Just like health insurance does not prevent illness, cyber insurance does not prevent breaches. It only helps after the fact, and only if requirements are met.

Many businesses assume that if they pay for the policy, they are covered. In reality, coverage is conditional and depends heavily on whether your business has implemented the right security controls.

The Hidden Risks of False Confidence

One of the biggest problems is that cyber insurance can create a false sense of security. Companies think they are protected, but when they go to file a claim, they discover they failed to meet key requirements. That could mean outdated systems, missing documentation, or even basic things like not having multi-factor authentication enabled.

Without the right preparation and ongoing compliance, the policy may not pay out when an incident occurs.

Why Coverage Is Getting Harder to Obtain

Cyber insurance used to be easier to get. But with the rise in ransomware and AI-driven attacks, carriers are tightening their standards. Premiums are rising. Questionnaires are getting longer. Some providers now require third-party validation that your IT environment meets minimum standards.

If you are not already aligned with these expectations, you may be denied coverage altogether or face exclusions that leave you vulnerable.

How to Avoid the Most Common Pitfalls

The key to unlocking real protection from cyber insurance is having a proactive IT strategy. That includes regular risk assessments, documented policies and procedures, and strong technical controls like patch management, endpoint detection, and access control.

Beau outlines the most common reasons companies get denied claims or lose coverage. At the top of the list are weak internal controls, poor incident response plans, and a lack of alignment between IT and executive leadership.

Partnering With IT for Better Protection

Cyber insurance should not be handled in isolation. It needs to be part of a larger security and business continuity plan. That is where a trusted IT partner makes a difference. By working with an MSP like SST, businesses can stay ahead of evolving requirements and ensure their coverage remains valid.

A strong IT partner helps document your environment, test your recovery plans, and keep your systems aligned with what insurers expect.

Ready to Get Cyber Insurance Right?

If your cyber insurance policy feels more like a box you checked than a safety net you trust, it is time to reassess. You do not want to find out during a crisis that you were never truly covered.

SST helps businesses understand, align, and optimize their cybersecurity and insurance strategies. From risk assessments to policy guidance, we help make sure your protections are not just theoretical but actionable.

Let’s make sure your business is ready. Schedule a conversation with our team and get the clarity you need.