Cyber Insurance Won’t Save You: The IT Gaps That Could Void Your Claim

Cyber insurance is no longer a luxury for small businesses—it’s a necessity. With ransomware, phishing, and data theft at all-time highs, most Pittsburgh-area companies have taken the step of adding cyber coverage to their insurance policies.

But here’s what too few business owners realize: insurance doesn’t pay out automatically.

Insurers are now requiring businesses to meet strict IT security standards—and prove it—before they’ll approve a claim. If your company suffers a breach but can’t demonstrate the right protections were in place, your claim could be denied outright. And unfortunately, that happens more often than you think.

At SafSecur, we’ve seen local firms—especially CPA practices, small healthcare providers, and manufacturers—get burned by this gap. They paid their premiums. They thought they were covered. But they didn’t realize that missing logs, unpatched systems, or vague MSP responsibilities could be enough to void their protection when they needed it most.

The New Rules of Cyber Insurance: What Carriers Expect from You

Most business owners assume that insurance works like any other type of policy: you get hit, you file a claim, you get paid. But with cyber insurance, there’s a growing list of preconditions that carriers are using to evaluate whether they’ll even consider a claim.

These requirements aren’t always obvious, and they’re constantly evolving. Here are the key IT controls that insurers are now demanding:

1. Multi-Factor Authentication (MFA)

This is no longer optional. Carriers expect MFA to be enforced on all remote access—email, VPN, cloud apps, and especially administrator accounts. If even one privileged user isn’t covered, your policy could be voided.

2. Proven, Tested Backups

Daily, automated, offsite backups are required—but it doesn’t stop there. Carriers want evidence that your backups are being tested regularly and that you can restore data quickly. If backups fail or haven’t been verified, your recovery costs won’t be reimbursed.

3. Advanced Threat Protection (EDR/XDR)

Basic antivirus software no longer satisfies insurance requirements. You need Endpoint Detection and Response (EDR) or Extended Detection and Response (XDR) in place across your network. Bonus points if it’s monitored by a security operations center (SOC).

4. Patch Management and Vulnerability Remediation

If your systems aren’t fully patched—especially firewalls, operating systems, and remote access tools—insurers will treat it as negligence. You must follow a documented patching process and be able to prove regular updates.

“My MSP Handles That” Won’t Hold Up in Court

Here’s where most Pittsburgh businesses unknowingly put themselves at risk.

They’ve outsourced IT to a managed service provider (MSP) and assume everything is handled. But in reality, many MSPs do the bare minimum, and even fewer provide the documentation you’ll need in the event of a claim.

We’ve reviewed dozens of IT environments where:

• MFA was set up but not enforced for all users
• Backups were running, but no one had tested a restore in over a year
• Patch reports existed, but critical systems hadn’t been updated in months
• Firewall licenses were expired, leaving networks exposed

When something goes wrong, your name is on the policy, not your MSP’s. That means the burden of proof is yours. If your provider can’t quickly produce the reports, logs, and alerts that insurers request, you’re on the hook for the entire loss.

How SafSecur Protects Local Businesses from Insurance Denials

At SafSecur, we take a proactive, audit-ready approach to IT management and security. Our goal isn’t just to protect you from hackers—it’s to protect your business from the financial fallout of a breach, whether it’s from data loss, downtime, regulatory fines, or insurance complications.

We help you:

• Map IT controls directly to your cyber insurance policy
• Perform quarterly security audits that document proof of compliance
• Enforce security standards across users, systems, and devices
• Manage your backup and recovery systems with regular testing
• Monitor your firewall and EDR tools daily, not just set them and forget them

Most importantly, we give you the one thing your insurer actually wants: evidence. When the stakes are high, showing that you followed best practices is the difference between being covered and being out hundreds of thousands of dollars.

Real-World Risks: It’s Happening Here in Pittsburgh

This isn’t just a theoretical risk or something happening to big-city corporations. Here in Pittsburgh, we’ve worked with local businesses who’ve:

• Had claims denied because a single remote user didn’t have MFA
• Paid $60,000+ out-of-pocket after ransomware encrypted their file server and backups failed
• Thought their antivirus was enough, only to learn it missed a months-old vulnerability

In most of these cases, the business had IT support. But that support wasn’t aligned with insurance requirements, and that small disconnect turned into a huge problem.