Why Compliance Isn’t Coverage, and Other Hard Truths

With major UK companies like Marks & Spencer, Jaguar Land Rover and Co-op hit by cyber-attacks, no one is safe. Don’t let your business be next. The promise of cyber insurance sounds reassuring: a safety net for the inevitable. In an era where cyberattacks are a question of when, not if, having a policy to cover the costs of a breach should be straightforward. But the gap between what businesses believe their cyber insurance covers and what it actually delivers is widening.

The Shrinking Safety Net

Cyber insurance isn’t what it used to be, and it’s certainly not a magic bullet. Insurers, reeling from massive payouts due to the sheer volume and sophistication of attacks, are tightening their belts. We’re observing two critical shifts:  

1. Exclusions are expanding

What was once covered, or vaguely defined, is now totally excluded. Acts of war, nation-state attacks, and even certain types of ransomware demands are increasingly finding their way onto the “not covered” list. This leaves businesses vulnerable to the very threats they sought protection from.  

2. Coverage limits are shrinking

Even when a policy does cover an incident, the financial limits are often being reduced, while premiums are skyrocketing. A catastrophic breach can easily exceed these new, lower limits, leaving organisations to pay out millions in recovery costs and therefore suffer from considerable financial loss.

Compliance vs. Real Protection

Many organisations focus intensely on meeting the minimum compliance standards set by their cyber insurance providers. This often involves questionnaires and checklists that verify the presence of certain security controls like multi-factor authentication, endpoint detection, or regular backups. However, compliance does not equal coverage, nor does it equal comprehensive security. An attacker doesn’t care if you checked a box, they care if you have a vulnerability they can exploit. If you meet all the compliance standards but still suffer a breach because your tools aren’t effectively configured or monitored 24/7, your insurer might still dispute the claim.    

Bridging the Gap with Proactive Cybersecurity

The answer lies in shifting focus from solely recovering from an attack to preventing it and minimising its impact with superior detection and rapid response. This is where a truly proactive cybersecurity posture becomes non-negotiable. Arctic Wolf’s Security Operations Cloud isn’t just another security tool, it’s a comprehensive platform that delivers 24×7 monitoring, detection, and response through a concierge security team – The concierge team are your dedicated security specialists who act as an extension of your IT team. They move beyond simple compliance checklists to provide:

• Continuous vulnerability management: Identifying and remediating gaps before they can be exploited.
• Active threat detection: Their security operations approach ensures that even if an attacker bypasses one control, they are detected and stopped quickly.
•  Guidance beyond compliance: Arctic Wolf helps you not just meet compliance standards, but exceed them with an operational security posture that significantly reduces your risk profile.
• Reduced attack surface: By improving your overall security hygiene, Arctic Wolf directly addresses the root causes of many breaches, including those originating from third-party integrations.

Cyber insurance is not a substitute for robust, proactive cybersecurity. In fact, a stronger security posture, like that delivered by Arctic Wolf, can often lead to better insurance terms, lower premiums, and most importantly, a dramatically reduced chance of needing to file a claim in the first place. Discover new insights into the cyber insurance market, including how coverage expectations are changing, reasons behind the growing tension between insured and insurers, the current rate of claims and much more in the Arctic Wolf 2025 Cyber Insurance Outlook.   Don’t wait for a breach to discover the gaps in your coverage. Partner with Nexstor and Arctic Wolf to build a truly resilient defence.