Cyber insurance sounds like a safety net.

Get a policy, and if your business gets hacked, you’re covered—right?

Not exactly.

Here’s the truth most businesses don’t hear until it’s too late:
Cyber insurance doesn’t protect you from the fallout unless you’ve already done the work to protect yourself.

Let’s break it down.

Insurance Doesn’t Replace Preparation

Just like car insurance doesn’t prevent accidents, cyber insurance doesn’t stop breaches.

It might help with costs after an attack—if you qualify.

But here’s the catch: most policies require you to have basic cybersecurity practices in place before they pay out.

If you don’t?
You might be left to deal with the damage on your own.

Most Claims Get Denied for One Reason

Lack of preparation.

Many small businesses buy insurance thinking they’re safe.
But when they file a claim, they find out they didn’t meet the policy requirements.

• No multi-factor authentication?
• No documented incident response plan?
• No employee training?

Denied.

What You Need to Do First

Before you think about cyber insurance, get your house in order.

Here’s where to start:

Use strong passwords + MFA.

This is non-negotiable. If you’re not doing this, you’re already behind.

Train your team.

Most breaches start with someone clicking a bad link. Make sure your staff knows how to spot them.

Have a response plan.

If you get hit with ransomware, you can’t afford to freeze. Know who does what and when.

Back up your data securely.

Insurance won’t recover your files. Backups will.

Review your contracts and access controls.

Limit vendor access. Offboard ex-employees. Patch your systems regularly.

Use Insurance as a Last Line, Not Your First

Cyber insurance should be your backup, not your strategy.

It’s there for when things slip through the cracks—not to cover years of neglect.

Because when a breach happens, your clients won’t care about your policy.

They’ll care that you didn’t prevent it.

Bottom Line

Cyber insurance can help.

But only if you’ve done the work first.

Secure your systems. Train your people. Build a plan.

Then—and only then—think about coverage.

That’s how you protect your business for real.