Why Your Insurance Company Shouldn't Be Your Cybersecurity Provider

Cyber insurance has become a vital part of protecting your business in today’s threat-filled digital landscape. But a growing number of insurance carriers are offering something beyond coverage—they’re offering cybersecurity “services.” On the surface, it sounds convenient. Why not get both protection and prevention from the same provider?

Here’s why not.

1. Conflicting Priorities

Your insurance company’s primary goal is to minimize risk to them. That means their security advice may be driven by what reduces their exposure—not necessarily what strengthens your operations or sets your business up for long-term resilience. They might recommend only the cheapest or most basic security controls necessary to underwrite your policy, not what’s actually best for your business.

2. Lack of Specialization

Cybersecurity isn’t an add-on. It’s a discipline that demands specialized expertise, real-time threat monitoring, and deep familiarity with your business operations. Most insurance companies are not cybersecurity firms. They’re not equipped to provide the kind of threat hunting, rapid incident response, or technical remediation that a real cybersecurity provider delivers.

3. One Size Fits None

The cybersecurity programs offered by insurers are often cookie-cutter. They're designed to check boxes, not tailor solutions. Your business may have specific regulatory, technical, or operational needs that require more than just “standard” tools. What’s worse—if you do get breached, the insurer might deny coverage if you deviated from their limited recommendations.

4. They’re the Payer, Not the Protector

If a fire breaks out, you don’t call your insurer to put it out—you call the fire department. The same applies to cybersecurity. Your security provider should be your rapid responder, your strategist, and your digital bodyguard. The insurer’s role is to assess the damage afterward and potentially cover costs. Let them play that role—but don’t confuse them for your front-line defense.

5. Claims Conflicts and Clawbacks

Here’s where things get truly painful.

If your cybersecurity provider is also your insurer, you’re exposed to a dangerous conflict of interest. In the event of a breach, they may issue a payment quickly to limit the fallout. But that’s not the end of the story.

Later, during the claims investigation, if the insurer determines that your security posture—ironically, the very one they recommended or implemented—was out of compliance with the policy terms, they may attempt to claw back the payout. This often results in litigation and prolonged financial and reputational damage, compounding the original incident.

It’s a worst-case scenario: You suffer a cyberattack, think your coverage saved you—only to have your insurer sue you months later to recover the funds.

The Better Approach: Keep Your Shields and Your Safety Net Separate

Cyber insurance is essential. So is world-class cybersecurity. But they’re not interchangeable, and putting them under the same roof creates risk—not convenience. You need an independent cybersecurity team that:

• Works for you, not your insurer.

• Designs a program around your specific risk profile.

• Helps you qualify for better insurance coverage without compromising your real-world defenses.

• Can go to bat for you in the event of a claim—instead of sitting on the other side of the table.

Want to see if your cybersecurity is too closely tied to your insurance provider?

Schedule a free, 10-minute cyber assessment with Bawn. Our team of former FBI cyber experts will help you separate smart security from sales-driven “security lite.”

👉 Click here to book your assessment

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