Cyber insurance can support recovery, but it is not a substitute for sound controls.
As cyber incidents become more common, many organisations are considering cyber insurance as part of their risk management strategy. Cyber insurance can provide access to specialist support and may help cover certain incident-related costs. However, it should not be viewed as a complete solution.
The value of a cyber insurance policy often depends on whether management understands the policy conditions before an incident occurs. Organisations may need to notify the insurer quickly, use approved service providers, preserve evidence and demonstrate that expected controls were in place.
Why this matters
Cyber insurance should be integrated into the broader cyber risk management process. A policy that is not understood, not aligned to response plans or dependent on controls that have not been implemented may create a false sense of comfort.
What management should consider
- Understand what the policy covers and what it excludes.
- Confirm notification requirements and insurer contact details.
- Know whether insurer-approved legal, forensic or incident response providers must be used.
- Review control requirements such as multi-factor authentication, backups and endpoint protection.
- Align the incident response plan with insurance notification procedures.
- Keep evidence of key security controls and remediation actions.
- Review cover limits against realistic business interruption and recovery scenarios.
Common pitfalls to avoid
Buying cover without understanding conditions and exclusions.; Failing to align incident response steps with insurer requirements.; Assuming insurance replaces preventive controls..
Key takeaway
Do not wait for a cyber incident to read the cyber insurance policy. Management should understand the policy, conditions and response requirements before a crisis occurs.
Practical first step
Hold a short workshop with finance, IT, risk and insurance representatives to confirm policy conditions and incident notification requirements.
How Nexia SAB&T can assist
Nexia SAB&T can assist with cyber insurance readiness reviews, incident response readiness assessments, ransomware readiness reviews and control gap assessments.
Author details: Rob Galetti | IT Audit and Cybersecurity | Nexia SAB&T
Date: 16 September 2026
