August 07, 2025
Cyber Insurance Won't Save You Without Proof
Cyber insurance is no longer optional for most businesses—it's a necessity. From ransomware recovery to legal fees and regulatory fines, a solid cybersecurity policy can be the financial safety net that keeps your company afloat after an attack.
But here's the hard truth: insurance alone won't save you.
A growing body of evidence shows that many claims are denied—not because the breach wasn't real, but because the business lacked documentation to prove they were upholding their end of the deal. In fact, recent reports suggest up to 44% of cyber insurance claims are denied due to technicalities, incomplete records, or failure to follow policy conditions.
This post will walk you through the critical evidence your organization needs to have in place before a cyberattack occurs. Because if you can't prove you were prepared, your payout could vanish.
The Hidden Risk Inside Every Cyber Policy
When you buy cyber insurance, you're entering into a contract filled with dense language, exclusions, and assumptions. While your policy might look comprehensive on the surface, the fine print often holds the real conditions for getting paid.
Here's what's often buried in that fine print:
- Policies may exclude claims if basic security controls (like MFA or antivirus) weren't in place.
- Carriers often require proof that you followed an incident response plan.
- Documentation of training, risk assessments, and system monitoring may be required to validate a claim.
- The burden of proof almost always falls on the insured—you.
Insurance companies aren't looking for excuses to pay quickly; they're looking for reasons to deny or reduce claims. And if your business can't provide the right documentation, your claim might never make it past initial review.
What Documentation Do Cyber Insurers Expect?
Insurers want evidence that you took reasonable steps to protect your business—before the breach happened. They're not just checking boxes; they're evaluating whether you upheld your obligations as outlined in your policy.
Here's what you'll need to show:
1. Documented Security Policies
Insurers look for evidence that your organization had written and enforced security policies in place prior to the breach:
- Acceptable Use Policy (AUP)
- Password management and MFA enforcement
- Remote work or BYOD policies
- Data classification and retention guidelines
- Vendor risk management procedures
These documents prove you had a structured approach to information security—and they help demonstrate that human error wasn't the result of a non-existent policy.
2. Cybersecurity Risk Assessments
Ongoing assessments show that your business actively monitored and mitigated its cybersecurity risks.
- Annual internal or third-party risk assessments
- Penetration testing results
- Vulnerability scans and patch management records
- Remediation plans and timelines
Failing to assess risks or remediate vulnerabilities could be grounds for denial, especially if an attacker exploited an unpatched system you didn't address.
3. Incident Response Plan (IRP)
Every insurer expects you to have a plan—and proof that it was implemented correctly.
- A written, tested IRP outlining roles, communication plans, and containment actions
- Records of tabletop exercises or simulated breach drills
- Clear documentation of response steps taken during the incident
If your team panicked and improvised during a breach, expect scrutiny.
4. User Training and Awareness
Human error remains the top cause of breaches. Insurers want proof that you made a reasonable effort to train your workforce.
- Employee cybersecurity awareness training records
- Phishing simulation results
- Signed policy acknowledgment forms
- Records of role-specific training (e.g., for finance or executive teams)
Failure to train employees—even if you had the right tech in place—can still result in denial.
5. Technical Controls and System Logs
Proof of active cybersecurity controls is essential. It's not enough to say you had antivirus; you need to show how and when it was used.
- Logs from SIEM or EDR tools
- Proof of endpoint protection deployment
- Firewall configurations and access control logs
- Multi-factor authentication enforcement reports
- Backup configurations and test restore records
This is where most businesses fall short. Without logs, there's no evidence the system was working—or even turned on.
6. Regulatory Compliance Evidence (if applicable)
If your business is subject to specific compliance frameworks, insurers may require proof of adherence:
- Financial services: FTC Safeguards Rule, GLBA documentation
- Healthcare: HIPAA compliance, BAAs, privacy training logs
- Retail/eCommerce: PCI DSS self-assessments and scanning vendor reports
- Gaming/casinos: Nevada Gaming Control Board IT audit approvals
If your breach also triggers a regulatory investigation, missing this evidence can lead to both a denied claim and a hefty fine.
Real-World Example: A Denied Claim in Action
Let's say your business is hit by a ransomware attack. You immediately contact your cyber insurance carrier and submit a claim. But after a few weeks of investigation, here's what they find:
- No written MFA enforcement policy
- Endpoint protection was installed but not updated for six months
- Your last employee cybersecurity training was two years ago
- Your incident response plan existed—but was never tested or reviewed
Result: Claim denied.
You're now responsible for thousands—or millions—in damages: forensic investigations, data recovery, legal support, customer notifications, and potentially government fines. The carrier walks away. You're left holding the bag.
How to Proactively Prepare for a Claim (Even Before It Happens)
Too often, businesses focus on policies and tech—but not the proof. Documentation isn't just for compliance—it's a defensive shield.
Here's how to build yours:
1. Conduct a Cybersecurity Risk Assessment
Start with a current-state analysis of your threats, vulnerabilities, and controls. Identify documentation gaps as part of this process.
2. Assign Ownership
Designate someone to own your documentation library—typically your vCSO, CISO, or MSP partner.
3. Map Insurance Policy to Security Program
Work line-by-line through your policy. Match each obligation to an internal control or document.
4. Create a Central Repository
Store all documentation in one place—ideally in a secure, version-controlled platform accessible during an emergency.
5. Schedule Quarterly Reviews
Treat your evidence library like a living document. Update it as your policies, vendors, staff, or technology change.
Why Partnering with a Managed IT Services Security Expert Matters
This process can be complex. And insurers won't help you prepare it.
Orbis offers Compliance-as-a-Service (CaaS) and virtual Chief Security Officer (vCSO) support to help small and mid-sized businesses:
- Build and maintain evidence libraries aligned to insurance and regulatory requirements
- Perform gap analyses on documentation and technical controls
- Run tabletop exercises and test your incident response plans
- Prepare for breach recovery and post-incident reporting
When the breach hits, you don't want to start gathering evidence. You want to have it ready to go.
What Your Insurer Won't Tell You
Cyber insurers have a simple goal: reduce risk and minimize payouts. While their bundled services may look appealing, they often fall short where it matters most:
- They rarely offer customized documentation help
- They don't conduct in-depth control testing or compliance validation
- They are not a neutral third party—and won't advocate for you during a claim
That's why independent cybersecurity oversight matters. If your only security partner is your insurance company, you may be putting your business at risk.
Evidence Is Your Best Insurance
Insurance won't protect you unless you can prove you were already protecting yourself. The time to build your evidence isn't after the breach—it's now.
Orbis Solutions helps businesses in gaming, manufacturing, finance, and other regulated industries stay audit-ready, breach-prepared, and insurance-defensible. Our CaaS and vCSO programs are designed to keep your business secure—and your claims legitimate.
Don't wait until a breach to find out you weren't covered.
Click Here or give us a call at 702-605-9998 to Book a FREE Initial Consultation
