What Cyber Insurance Actually Requires (And Why Most Small Businesses Aren’t Ready)

Cyber insurance is no longer just for large corporations. Increasingly, small and mid-sized businesses are being asked by clients, partners, or vendors to carry it — and many are surprised to find out they don’t meet the basic requirements.

What Insurers Are Looking For?

Insurance providers typically look for a few key things before issuing or renewing a cyber policy:

1. Documented Cybersecurity Policies
   Insurers want to know you have written rules around data handling, password practices, acceptable use, and incident response. No policies? That’s a red flag.

2. Multi-Factor Authentication (MFA)
   If your email, file storage, or remote access doesn’t require MFA, you may not qualify — or your premium could spike.

3. Backup & Recovery Plans
   It’s not enough to say “we back up our data.” Insurers want to know:

   • How often?

   • Where is it stored?

   • Is it encrypted?

   • Can you recover quickly?

4. Employee Security Awareness
   Human error is still the #1 cause of breaches. A basic training program or phishing awareness program can reduce premiums and risk.

5. Incident Response Plan
   If an attack happens, who does what? Do you have a plan? Many policies require one on file.

Why Most Businesses Aren’t Ready

The problem? Most businesses:

• Don’t have policies written down

• Don’t test their backups

• Don’t know what their staff is clicking on

That’s where we come in.

How SignalHaven Compliance Helps

At SignalHaven, we help small businesses:

• Create custom cybersecurity policies

• Set up the protections that insurance requires

• Conduct readiness assessments so you pass your cyber insurance review