Cyber Insurance Changed the Rules for Small Business Security

For years, cyber insurance felt optional.

Policies were inexpensive.
Requirements were vague.
Claims were rare.

By early 2022, that changed.

Cyber insurance providers began tightening requirements, increasing premiums, and denying coverage to businesses that couldn’t prove they had basic security controls in place.

For many small businesses, this was the first time security became non-negotiable.

What Insurers Started Demanding

Cyber insurance questionnaires became far more detailed, asking about:

• Multi-factor authentication

• Backup and recovery testing

• Endpoint protection

• Access controls

• Incident response plans

Answering “yes” without proof was no longer enough.

Why SMBs Were Caught Off Guard

Many businesses believed insurance would protect them after an incident.

Instead, insurers were trying to prevent incidents altogether.

Small businesses often lacked:

• Documentation

• Centralized security management

• Ongoing monitoring

Which meant applications stalled - or premiums skyrocketed.

Insurance Became a Security Gatekeeper

Cyber insurance effectively introduced a new authority:
If your security wasn’t strong enough, you didn’t get coverage.

This forced organizations to:

• Formalize security practices

• Eliminate risky shortcuts

• Treat IT controls as business requirements

Security stopped being an IT preference and became a financial one.

The Ripple Effect

Insurance pressure accelerated adoption of:

• MFA across all users

• Tested backups

• Endpoint monitoring

• Managed security services

What had been “recommended” quickly became “required.”

Where Info Advantage Helped

Info Advantage worked with businesses to align their IT environments with cyber insurance expectations — not just to pass questionnaires, but to actually reduce risk.

Because insurance is a safety net - not a strategy.