In 2024, 73% of small businesses experienced a cyberattack — but only 17% have cyber insurance.

Even fewer realize their policies may not pay out without proper security measures in place.

Here’s the truth most business owners discover too late: having cyber insurance doesn’t guarantee coverage when you need it most.

Think of it like car insurance

You wouldn’t skip oil changes, brake checks, and tire rotations just because you have car insurance. If you neglect maintenance and get into an accident, your insurer can deny your claim.

Cybersecurity works the same way.

Cyber Insurance = Your Financial Safety Net

It can cover ransomware, data breaches, business interruption, legal expenses, and customer notifications.

Critical for recovery — but not a replacement for prevention.

Cybersecurity Measures = Your Day-to-Day Protection

MFA, endpoint protection, backups, employee training, email security, and regular updates.

These protect you before something happens.

𝗪𝗔𝗥𝗡𝗜𝗡𝗚: Most cyber insurance claims are denied due to lack of basic security controls.

You Need Both — Here’s Why: Insurance companies require it.

Nearly all policies include security obligations. No MFA? No backups? Your claim can be denied.

Real example: The City of Hamilton’s $18 million claim was denied for lacking MFA — a standard requirement.

Better cybersecurity = lower premiums.

Strong security can save you thousands annually while improving coverage terms.

Insurance doesn’t prevent attacks.

It helps you recover financially. Your security tools protect you before disaster strikes.

Regulated industries face stricter requirements.

For Massachusetts healthcare practices: HIPAA + 201 CMR 17.00 require specific safeguards.

Insurance covers losses — but won’t prevent OCR audits or state fines.

Bottom Line:

Cyber insurance is essential. Cybersecurity is essential.

They do different things — but work together to protect your business.

You wouldn’t drive without maintenance just because you have insurance. Your business deserves the same protection.

Not sure if your security measures meet insurance requirements? TeamShield IT helps Greater Boston businesses align cybersecurity with insurance obligations and compliance standards (HIPAA, PCI-DSS, 201 CMR 17.00).