If you feel like the online world has gotten a little scarier lately, you’re unfortunately not wrong for feeling that way. The last few years pushed businesses into the rapid digital transformation whether they were ready or not. Cloud adoption became widespread; people started working from their kitchen tables, and suddenly every device from your office thermostat to your delivery trucks is connected to the WiFi. Cybersecurity best practices were just thrown out the window.

And while all of this innovation is great, it also cracked open the Pandora’s box for cybercriminals. 

But here’s the twist nobody tells you until it’s too late: even if you’ve already bought cyber insurance, that doesn’t guarantee you’ll get paid when something goes wrong. In fact, many businesses think they’re safe right up until their claim gets denied. 

Let’s break down why attacks are increasing, what threats you actually need to worry about, how to follow cybersecurity best practices, what cyber insurance really does (and doesn’t) cover, and a few painful case studies of companies that got denied. 

Why Your Small Company Is Probably a Big Target 

Digital transformation is everywhere. Either you’re chasing after the latest tech or you’re getting left behind. The problem that comes with that is often we’re dabbling in tech we’re not familiar with, but somebody else out there has dedicated their lives to finding vulnerabilities for. 

Internet of Things 

From smart cameras to factory sensors, everything is connected now. Great for convenience, terrible for security. Most IoT devices aren’t built with security in mind, though, and that’s where the problem lies. 

The Cloud 

Businesses rushed to the cloud so quickly that they often skipped reading the fine print. (Spoiler: cloud providers aren’t responsible for everything you store there. Misconfigurations and weak access controls are a gold mine for digital thieves. 

Digital Transformation 

Businesses spent trillions modernizing tools, apps, workflows, and integrations. Every new system and integration is another potential weak spot. 

Remote Work Forever 

Home WiFi, personal laptops, shared devices. The remote work world is great for flexibility, terrible for maintaining one clean security perimeter. Hackers love this new playground. 

Put it all together and the FBI’s Crime Report makes a lot more sense. 

The Threats Every Business Should Watch Out For 

Cybercriminals don’t waste their time. They follow the trends, and most tend to go after the easiest victims. 

Ransomware 

Attackers don’t need to be geniuses; they can buy ransomware kits online and start launching attacks in minutes. Small businesses are prime targets because they’re likely to pay quickly. If you’re a small business, it might pay off to always be prepared with a Business Continuity Plan. 

Phishing 

Phishing is almost as old as the world wide web. Hackers tap into whatever fear or confusion is trending, such as pandemics, elections, tax season, fake UPS tracking emails, or even into our own greed (Nigerian prince, anybody?). One click can lead to stolen credentials and, eventually, a full network breach. That’s why it pays off to give your employees proper training. 

Insider Threats 

Up to 20% of breaches involve someone inside the company. Sometimes it’s malicious, but most of the time it’s: “Oops, I didn’t know I shouldn’t click that.” 

Fileless Attacks 

These attacks use the tools already inside your system, such as PowerShell, to stay off your radar. They’re just as terrifying as the rest, if not more, because they tend to not leave much of a footprint. 

This growing list is exactly why more businesses are looking at cyber insurance. But here’s where things get tricky. 

Cyber Insurance: Three Types You Should Know About 

Cyber insurance isn’t just one product; it’s a handful of different protections bundled together, and not all policies are the same. 

1. Cybertheft Insurance 

This covers direct digital theft. Think things like payroll scams, gift card fraud, and stolen funds. Any business that handles financial transactions or stores sensitive data is at risk. 

2. Cyber Liability Insurance 

This helps cover the fallout costs when data is compromised, including: 

• Lawsuits 
• Government fines 
• Breach notifications 
• Credit monitoring 

This is your “don’t go out of business after a breach” safety net. 

3. Cyber Extortion / Ransomware Insurance 

This covers: 

• Ransom payments 
• Forensics 
• System recovery 
• Business interruptions 
   

Some policies even give you access to negotiation experts (yes, ransomware negotiators are a real job now). 

But, and this is a big “but”, just because you bought cyber insurance doesn’t mean your insurer is obligated to pay you. You still need to follow the cybersecurity best practices they outline in the contract, otherwise it’s all void. 

3 Painful Examples of Cyber Insurance Claims Getting Denied 

Think of these as cautionary tales every business owner should hear. 

1. Cottage Health vs. Columbia Casualty 

Cottage Health had a breach and filed a claim. They had agreed to maintain certain risk controls but failed to do so. Policy requirements aren’t friendly suggestions, they’re contracts. 

2. BitPay vs. Massachusetts Bay Insurance Company 

BitPay lost millions in bitcoin after a partner company was hacked. They filed a claim, but the insurer said the loss wasn’t “direct” because the breach happened externally, due to having a business partner phished. 

BitPay tried to appeal, but this case shows how tricky insurance language can be, and how important employee security training is. 

3. International Control Services vs. Travelers Property Casualty Company 

Travelers claimed ICS misrepresented their security posture. The company said they used Multi-Factor Authentication everywhere. Turns out, it was only on the firewall, not on servers or internal systems. 

Travelers went as far as trying to void the entire policy. 

Moral of the story: 
If your policy says you have to follow certain rules, you REALLY need to follow those rules. 

Cybersecurity Best Practices to Protect Your Small Business Against Threats Summary

Cyber insurance is valuable, but it only works if: 

• You understand what’s covered and what’s not 
• You follow the security requirements 
• Your employees are trained 
• Your systems are configured correctly 

This is where having a solid IT service provider like NetworkAntics pays off. Not only can they help you follow the highest level of cybersecurity best practices, but they can also help you stay compliant with what your cyber insurance policy expects; dramatically increasing your chances of getting your payout when you need it most. 

If you want help reviewing your contracts or making sure your business is fully compliant with your cyber insurance, come talk to us. We offer consultations with zero pressure.