Compliance ≠ Security: Why Regulators and Insurers Want More

It’s a phrase we hear all the time from business leaders:

“We passed our audit—we’re covered.”

Or worse:

“We’re compliant, so we’re secure... right?”

Here’s the uncomfortable truth: compliance is not the same as security—and increasingly, regulators and cyber insurers are treating the two very differently.

If you think passing an audit is enough to protect your business from fines, lawsuits, or denied insurance claims, think again.

✅ What Compliance Does Do

Let’s start with the good news.

Compliance frameworks like HIPAA, GLBA, FTC Safeguards, PCI-DSS, and NIST CSF help you build a strong baseline. They force organizations to:

• Create policies and procedures

• Assign accountability

• Review vendor relationships

• Document safeguards

• Educate staff

• Check a long list of boxes

Compliance is about alignment—with laws, industry regulations, and customer requirements. It’s important. But it’s only a snapshot in time.

❌ What Compliance Doesn’t Do

Passing an audit or completing a checklist doesn’t guarantee that:

• Your systems are truly secure

• Your employees won’t fall for phishing

• Your backups are working

• Your attack surface is being monitored

• You can recover from ransomware

• Your security measures are legally defensible

Security is dynamic.
Threats evolve.
Attackers don’t care about your compliance badge.

That’s why regulators and insurers are digging deeper.

🔍 Why Regulators Want More Than Compliance

In the wake of major breaches, regulatory bodies like the SEC, FTC, OCR, and state AGs are increasingly asking:

• Did the company implement controls that align with risk—not just checkbox standards?

• Were the controls tested? Updated? Enforced?

• Can the company prove it acted with reasonable care?

Recent enforcement actions have punished firms that were technically “compliant” but failed to protect sensitive data in practice. That’s because regulators are now focused on outcomes, not just paperwork.

🛡️ Why Cyber Insurers Want More, Too

Cyber liability carriers used to issue broad policies with minimal underwriting. Not anymore.

Today’s carriers are asking:

• Do you have MFA enabled everywhere?

• Is endpoint protection actively monitored?

• When was your last penetration test?

• Do you have a defensible incident response plan?

• Can you prove your controls are working?

Even if you’re compliant, you may still be denied coverage or have claims rejected if insurers find gaps that increase your risk—or if you made inaccurate disclosures during underwriting.

🧩 The Missing Piece: Defensibility

Compliance helps you check the box.
Security with defensibility helps you:

• Prevent attacks

• Limit damage

• Respond effectively

• Stand up to lawsuits

• Satisfy regulators

• Get insurance claims paid

At Bawn, we help companies build defensible cybersecurity programs—ones that not only align with compliance standards, but hold up in real-world incidents, insurance audits, and legal investigations.

🚨 Bottom Line

Compliance is a starting point, not the finish line.
If your cybersecurity efforts stop at the minimum, you may be leaving your business exposed.

Regulators and insurers aren’t just asking if you followed the rules. They’re asking if you were responsible, proactive, and prepared.

→ Want to know if your program is defensible—or just compliant? Let’s find out together. Book a complimentary Cyber Liability Readiness Review.