Cyber insurance is now a compliance standard
Most people still think of cyber insurance as a basic safety net. It’s not. It’s become a compliance filter. Whether you’re an MSP or an SME, if you can’t show you’re managing cyber risks in real time, you’re either going to pay a lot more, or get turned down for coverage entirely.
Insurance companies are adjusting, fast. They’re no longer paying out just because you held a policy. Now they want proof. They want to see systems that demonstrate proactive defense: working two-factor authentication, tested incident response plans, and adherence to frameworks like Cyber Essentials or ISO 27001. If it’s not implemented and validated, it doesn’t count.
Ritchie Puckey, Head of Compliance at Espria, pointed out what many ignore: SMEs in the UK are being blindsided. He’s seeing clients get hit with insurance premium spikes upwards of 300%, or worse, being denied outright, because they can’t show that they’re actually managing their risk. That’s not theoretical; it’s operational. And it affects your bottom line.
C-suite leaders need to understand what’s happening. What used to be a secondary concern for the IT department is now a front-line priority that influences core business functions. If you’re not treating cyber insurance like compliance, you’re already lagging.
It’s no longer: “Do we have cyber insurance?” The right question now is: “Can we prove we’re worth insuring?”
Certification requirements are becoming non-negotiable
Insurers aren’t just guessing anymore. They’re using checklists. If you’re not certified, you’re not compliant. It’s that simple. You need frameworks like ISO 27001, Cyber Essentials, and Cyber Essentials Plus in place to even meet minimum requirements.
This isn’t bureaucracy; it’s about clarity for underwriters. These certifications are proof that you’re not sleeping on cybersecurity. They show structure, processes, and accountability. Insurers want to see that you’ve got the basics down: policies are written, systems are audited, and protections are verified. They’re not going to take your word for it, and they shouldn’t.
This level of scrutiny is hitting everyone: MSPs, large clients, and small players. If you’re in that ecosystem and relying on third-party services, those vendors must also be holding up their end. If they’re not certified or can’t pass a security audit, your business becomes collateral damage.
For C-level leaders, this changes the nature of strategic planning. These certifications should be part of the checklist in supplier onboarding and contract renewals. They also belong in your quarterly risk reviews. Executives need to see security certification not as a technical detail, but as a non-negotiable condition for continuity, compliance, and in many cases, customer trust.
SMEs are falling behind, and paying the price
Small and medium-sized enterprises (SMEs) are struggling to meet the new expectations around cyber insurance. This isn’t a technical shortcoming, it’s a strategic vulnerability. A lot of SMEs still treat cybersecurity as something secondary, or worse, as a one-time task. That mindset is now a direct obstacle to maintaining or securing insurance coverage.
Insurers aren’t being vague anymore. They’re asking for specifics: Have you tested your incident response plan in the last quarter? Is multi-factor authentication enforced across all user accounts? Are your systems regularly audited against known security benchmarks? If the answers aren’t documented and verifiable, you’re not going to meet the threshold for coverage.
The financial impact here is real. According to Ritchie Puckey, Head of Compliance at Espria, some SMEs are watching premiums jump by 300%—and others are being denied renewals entirely. These aren’t isolated incidents. They’re warning signs that insurers are recalibrating who they’re willing to cover based on actual cyber maturity, not intentions or policies sitting on paper. When insurers dispute claims or exit policies, it’s because the foundational controls weren’t in place or sufficiently tested.
C-suite leaders in SMEs need to reframe their thinking. Cybersecurity is not just an IT function; it’s linked to business continuity, financial health, and market credibility. Underwriters don’t care about budgets or headcount, they care about controls, audits, and validation. If those elements are missing, your business will be considered too high-risk to cover.
Waiting to act will cost more than just higher premiums. It’ll cost resilience, operational flexibility, and potentially the trust of clients and investors.
Cybersecurity is now a boardroom responsibility
The security conversation is changing. It no longer belongs strictly to your technology team. Today, cybersecurity policy and execution are directly tied to financial risk, operational continuity, and insurance viability. That makes it a permanent agenda item for executive leadership, starting with the CFO and COO.
You can’t firewall your way around this anymore. Executives need visibility into how cyber threats are being managed, from staffing and tooling to policy enforcement and contingency planning. Risk decisions, budgets, and business continuity planning all depend on the board’s understanding of the firm’s cyber posture.
As Ritchie Puckey from Espria clearly pointed out, the real issue isn’t just whether a business is insured, it’s whether it can prove it deserves to be. That shift redefines the compliance landscape. Insurers aren’t covering who they used to. If your security controls aren’t active, tested, and transparent, you’re no longer a qualified client in the eyes of underwriters.
This also changes how companies need to think about internal reporting. Tech teams can’t be operating in a silo. CISOs need a seat at the executive table, and leadership needs to be reviewing cyber risk data the same way it would financial or legal exposure data.
The takeaway here for executive leaders is clear: if you delegate cybersecurity and don’t track its effectiveness, you’re not only risking system downtime, you’re weakening your position in the market and compromising your ability to secure the insurance needed to operate with confidence.
MSPs have become a cyber insurance liability
Managed Service Providers (MSPs) are becoming a key concern for cyber insurers, and not in a positive way. The reason is simple: MSPs handle core infrastructure, financial data, and sensitive customer systems. If they’re compromised, their clients are exposed. That direct link is now a major risk factor in underwriting decisions. Insurers are starting to treat clients who rely on insecure or unaudited MSPs as high risk, even if the client’s own practices are solid.
This isn’t speculation. Robin Ody, Principal Analyst at Canalys (now part of Omdia), made it clear. He said cyber insurers are questioning whether they can insure a customer at all if that company depends on a third-party MSP that hasn’t gone through an audit or holds no insurance itself. The logic is unavoidable, if the MSP is the weak point and introduces risk, then no amount of internal controls by the client will matter.
For executives, this should change how third-party relationships are evaluated. It’s no longer enough to assume your MSP has good security. You need documentation. You need proof. That means confirmed risk management processes, regular audits, security certifications, and possibly even requiring that they carry their own cyber insurance.
The broader implication is that vendor risk equivalently becomes business risk. If your MSP isn’t meeting modern security standards, it won’t just affect your operations, it will affect your insurability. And if you lose that, you lose flexibility, compliance standing, and possibly revenue opportunities tied to supplier standards or industry regulations.
The C-suite needs to bring MSP oversight into strategic focus. Procurement, IT, and risk functions must align in evaluating and continuously reviewing the cyber posture of all critical service providers. Otherwise, you may not only inherit their vulnerabilities, you may inherit their policy exclusions too.
Key takeaways for leaders
- Cyber insurance is now a compliance standard: Leaders should treat cyber insurance as a strategic compliance benchmark, not a backup policy. Insurers now expect verified controls and security practices in place before offering or renewing coverage.
- Certification is non-negotiable: Executives must ensure their organizations meet key cybersecurity certifications like ISO 27001 and Cyber Essentials, as these are now default prerequisites for obtaining affordable and valid insurance coverage.
- SMEs are facing massive insurance gaps: Decision-makers at SMEs must urgently assess and raise their cyber maturity. Inability to prove effective risk management is now leading to 300% premium hikes or complete denial of coverage.
- Cybersecurity belongs in the boardroom: Risk oversight of cybersecurity now sits with CFOs and COOs. Leaders should integrate cyber resilience into strategic planning to ensure financial viability and operational continuity.
- MSP reliance now increases insurance risk: Companies must reassess their MSP relationships. If a provider lacks audits, insurance, or basic controls, your ability to obtain cyber insurance may be directly impacted.
