What is Cyber Insurance?

What Michigan Small Businesses Need to Know

Cyberattacks are growing in frequency and severity; even small Michigan businesses are prime targets. The right insurance policy can help cover financial losses after an incident, but only if you meet the strict requirements insurers now demand.

The global average cost of a breach reached $4.45 million in 2024, and many small organizations never fully recover after an attack.

In this blog, we’ll break down what cyber insurance covers, how policies have evolved, and what steps you need to take to protect your business and ensure your claims will be honored.

What Does Cyber Insurance Cover

At its core, cyber insurance is designed to reduce the financial impact of a cyber incident. Policies typically cover:

• Incident response costs (forensics, investigation, and breach containment)
• Data recovery and restoration
• Notification costs if customer records are compromised
• Legal expenses and regulatory fines
• Business interruption losses from downtime
• Ransom payments, if legally allowed

This coverage can be the difference between recovery and closure for small businesses.

Premiums Are Getting Higher & Guidelines Stricter

Insurance providers are tightening the rules as attacks become more frequent and damaging. Premiums are rising, and coverage comes with more requirements. To qualify, or to avoid having a claim denied, you often must prove that you have baseline protections in place, such as:

• Multi-Factor Authentication (MFA) on all critical systems
• Regular, verifiable data backups stored securely offsite
• 24/7 monitoring to catch unusual activity
• Security awareness training
• Endpoint detection and response tools
• Patching

Without these safeguards, insurers argue that businesses are too high-risk. CISA recommends many of the same baseline protections as essential cybersecurity hygiene.

The Danger of “Check-the-Box” Security

One of the most common mistakes we see is businesses treating security requirements as a checklist. They may say they have MFA or monitoring in place, but the truth emerges when an attack occurs and the insurance company audits them.

Too often, insurers find that safeguards were incomplete or poorly implemented. In these cases, claims are denied, leaving the business to absorb all the costs of the attack. This is not just a theoretical risk. Real companies have faced devastating outcomes after discovering their policies did not apply because controls were not enforced.

How Yeo & Yeo Technology Helps You Stay Covered

Meeting insurer requirements isn’t a one-time exercise, it’s an ongoing process. That’s where Yeo & Yeo Technology comes in. We help Michigan businesses:

• Implement MFA, backups, and monitoring correctly from the start
• Conduct regular audits to confirm compliance with insurer guidelines
• Provide documentation and reporting to prove controls are in place
• Train employees to avoid the human errors that often trigger attacks.
• Create layered defenses that not only satisfy your insurance provider but actually reduce your real-world risk

With more than 40 years of experience supporting Michigan businesses, our team ensures your security is not just a box checked, but a living system protecting your people, data, and operations.

Being Denied is a Risk You Can’t Afford

Cyber insurance is essential for today’s small businesses. It only works if you qualify and if your claims will stand up under scrutiny. Waiting to see if you’re covered after an attack is a risk no business can afford.

Get your complimentary cyber risk assessment today. Our cybersecurity specialists will review your security posture, identify gaps, and help you put the right controls in place, so your business is ready for both attackers and insurers.