Applying for cybersecurity insurance is not as simple as picking a plan off a shelf. Just like applying for life or health insurance, providers carefully assess your business’s risk profile before offering coverage.
If your application was rejected — or if you’re planning to apply — here are some common reasons insurers might hesitate:
1. Inadequate Security Measures
If an insurer sees that your organization lacks basic data protection protocols, you are viewed as a high-risk client. Without strong defences in place, insurers are unlikely to take on the financial burden of a potential breach.
Tip: Implement fundamental protections such as firewalls, endpoint security, encryption, and access controls.
2. Outdated Systems and Software
When was the last time you updated your antivirus software or audited your network firewalls? Using outdated systems leaves glaring vulnerabilities, which insurers see as a red flag.
Tip: Regularly update your security tools and software. Keep up with patch management and security upgrades.
3. Lack of Employee Cybersecurity Training
Even the best cybersecurity tools can’t protect you if your employees aren’t trained. Human error — like clicking on phishing emails — remains a leading cause of breaches.
Tip: Invest in regular cybersecurity awareness training. Your team should be your first line of defence, not your biggest risk.
4. Weak Risk Management and Incident Response Plans
Insurance providers look closely at how businesses prepare for and respond to incidents. Without clear risk assessments, business continuity strategies, and disaster recovery plans, you may struggle to get approval.
Tip: Build a comprehensive incident response plan and conduct regular vulnerability assessments.
How to Strengthen Your Cybersecurity Insurance Application
Ready to position your business as a low-risk applicant? Here’s where to start:
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Implement strong security controls like multi-factor authentication (MFA), intrusion detection systems, and encrypted backups.
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Maintain regular cybersecurity audits to identify and fix vulnerabilities before they’re exploited.
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Create a formal incident response plan and train your team to act quickly and effectively in the event of a breach.
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Document all cybersecurity policies and practices clearly — insurers will want evidence.
Partnering with a Managed Service Provider (MSP)
Overcoming these common challenges is easier with expert support. Partnering with a Managed Service Provider (MSP) can give you access to professional security assessments, best-in-class protection, and proactive risk management.
If you’re a Canadian business ready to strengthen your cybersecurity posture and secure insurance approval, co-managed IT services could be the key to success.
