Cyber Insurance and IT Security: What Insurers Commonly Expect in Canada and Bermuda
Cyber insurance has changed dramatically over the past few years. In both Canada and Bermuda, insurers are no longer issuing policies based solely on a short questionnaire or good intentions.
Today, coverage is increasingly tied to whether an organization can demonstrate that basic, well‑established IT security controls are actually in place. In some cases, missing controls can result in higher premiums, coverage exclusions—or an inability to obtain insurance at all.
While requirements vary by insurer, industry, and risk profile, there is now a clear set of common security expectations across the Canadian and Bermudian insurance markets.
Why Insurers Are Raising the Bar
Cyber claims—particularly ransomware, email compromise, and data breaches—have increased sharply in both frequency and cost. As a result, insurers have tightened underwriting standards and introduced evidence‑based assessments, audits, and mid‑term reviews.
In Bermuda, this shift is reinforced by stronger regulatory frameworks around cyber risk management, particularly in regulated sectors such as insurance, finance, and professional services.
Across both jurisdictions, insurers are looking for risk reduction, not just risk transfer.
Core IT Security Controls Cyber Insurers Commonly Expect
The following controls are widely referenced in Canadian underwriting guides and Bermudian regulatory frameworks and are now considered baseline expectations rather than advanced security.
1. Multi‑Factor Authentication (MFA)
MFA is one of the most heavily weighted controls in cyber underwriting.
Insurers commonly expect MFA to be enabled for:
- Email accounts
- Remote access (VPNs, cloud portals, remote desktops)
- Administrative or privileged accounts
Organizations without MFA on critical systems are often considered high‑risk or uninsurable.
2. Secure and Tested Backups
Backup controls are universally emphasized by insurers.
Common expectations include:
- Regular backups of critical systems and data
- Backups stored off‑network (offline or cloud‑based)
- Protection against ransomware tampering
- Periodic testing to confirm data can be restored
Backups are a key factor in limiting ransomware losses and business interruption claims.
3. Patch and Vulnerability Management
Insurers typically expect organizations to:
- Apply security patches in a timely manner
- Prioritize critical and high‑risk vulnerabilities
- Avoid unsupported or end‑of‑life systems
Unpatched systems remain one of the most common root causes of successful cyber attacks.
4. Endpoint Protection and Monitoring
Traditional antivirus alone is no longer sufficient for many insurers.
Common expectations now include:
- Endpoint protection on all company devices
- Centralized monitoring or alerting
- Protection for laptops and remote devices
Endpoint visibility is critical in detecting ransomware and credential‑based attacks early.
5. Email Security Controls
Because email is the primary entry point for fraud and malware, insurers often expect:
- Email filtering and scanning for malicious content
- Protections against impersonation and spoofing
- Controls to reduce phishing risk
Email compromise frequently leads to financial loss and downstream liability.
6. Access Controls and Least Privilege
Insurers increasingly assess how access is managed internally.
Common expectations include:
- Role‑based access controls
- Limited use of administrator privileges
- Regular review of user access
Excessive or unmanaged access increases both breach impact and claim severity.
7. Security Awareness and Training
Human error remains a major contributor to cyber incidents.
Insurers often expect:
- Regular security awareness training
- Education on phishing and fraud scenarios
- Clear reporting processes for suspicious activity
Training is viewed as a cost‑effective way to reduce preventable claims.
Canada and Bermuda: Same Expectations, Different Drivers
While the controls insurers expect are largely the same, the drivers differ slightly:
- In Canada, underwriting pressure is driven primarily by claims experience, ransomware losses, and insurer economics.
- In Bermuda, expectations are reinforced by regulatory guidance from the Bermuda Monetary Authority and expanding cyber governance requirements in regulated sectors.
For organizations operating in both jurisdictions, this convergence means a single, well‑designed security baseline can satisfy most insurer expectations.
What This Means for Organizations
Cyber insurance is no longer a checkbox exercise.
Organizations that want predictable coverage and smoother renewals should assume that:
- Insurers will verify controls, not just ask about them
- Missing controls may lead to exclusions or denial
- Security posture directly influences premium and insurability
Treating IT security as part of risk management, rather than just IT operations, is now essential.
Final Thought
In Canada and Bermuda alike, cyber insurers are sending a consistent message: reasonable security controls are no longer optional.
Organizations that invest in these fundamentals are not only better positioned to obtain insurance—they are also far more resilient when incidents occur.
