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Cyber insurance is no longer optional—it’s a critical part of any business continuity plan. Yet many organisations misunderstand what these policies actually cover. Understanding the details can help businesses avoid costly surprises and ensure they’re truly protected.

What Cyber Insurance Typically Covers

Most policies include:

· Incident response: Coverage for forensic investigations, legal counsel, and public relations support following a breach.

· Data recovery and system restoration: Reimbursement for restoring systems and recovering data after an attack.

· Business interruption: Compensation for lost revenue if operations are halted due to a cyber incident.

· Liability protection: Coverage for legal claims and regulatory fines if customer or employee data is compromised.

To maximise these benefits, businesses should maintain secure backups, document their incident response plans, and ensure systems are regularly updated.

What Cyber Insurance Often Doesn’t Cover

There are common exclusions that can catch businesses off guard:

· Outdated systems: Claims may be denied if the business uses unsupported software or fails to apply security patches.

· Third-party failures: If a supplier’s breach affects your business, coverage may not apply unless explicitly included.

· Social engineering: Losses from phishing or invoice fraud may require specific policy add-ons.

Regular risk assessments and cyber awareness training can help close these gaps and reduce exposure.

How to Strengthen Your Coverage Position

Insurers increasingly expect businesses to demonstrate strong cyber hygiene. This includes:

· Proactive monitoring and patch management

· Regular security audits and compliance checks

· Documented security practices and response protocols

· Clear records of system configurations and user access

These practices not only reduce risk but also improve the likelihood of a successful claim.

Final Thought

Cyber insurance is a valuable safety net—but it only works when paired with strong internal controls and a clear understanding of what’s covered. Businesses that take a proactive approach to cybersecurity are better positioned to recover quickly and minimise disruption when incidents occur.