Cyber Insurance and IT Compliance: What Underwriters Look For

Helping legal and finance firms prepare for renewals, reduce risk, and protect their cover.

Why Cyber Insurance Is Changing — Fast

With the rising frequency and cost of cyberattacks, cyber insurance providers are tightening their policies — and the requirements to qualify for or renew coverage are becoming more rigorous.

For legal and financial firms, simply having a policy in place is no longer enough. Underwriters want proof that your firm takes cybersecurity seriously — and your IT setup needs to reflect that.

What Underwriters Are Now Expecting

Insurers have shifted focus from just reactive cover to proactive risk prevention. That means firms must show that they’ve implemented the right technologies, policies, and protections — before a claim ever arises.

Here are some of the most common areas underwriters now assess:

Multi-Factor Authentication (MFA):

• Required on all remote access systems, cloud services, and admin accounts

• Often a minimum condition for coverage

Endpoint Detection and Response (EDR):

• Advanced monitoring tools that detect suspicious activity

• Shows your firm can prevent, isolate, and respond to threats quickly

Regular Backups — with Testing:

• Encrypted, off-site backups that are tested regularly

• Demonstrates your ability to recover from ransomware or data loss

User Awareness Training:

• Regular phishing simulations and training sessions

• Helps prove your people are part of your first line of defence

Patch Management and Software Updates:

• Delays in patching known vulnerabilities are now a major red flag

• Firms need a consistent, documented update policy

Legal Firms: Satisfying Coverage for Sensitive Data

Legal practices handle highly sensitive, regulated client information. To meet insurance requirements and reduce premium hikes:

• Ensure your systems are aligned with SRA guidance on cyber risk

• Maintain access logs and audit trails to track system use

• Protect client confidentiality with device encryption and role-based access

Firms that can demonstrate strong security protocols and regulatory compliance tend to benefit from lower premiums — and less hassle during the renewal process.

Finance Firms: Covering Data, Downtime and Accountability

Accountancy firms are often targeted due to the financial data they manage. Underwriters now look for:

• Proof of GDPR compliance and FCA-aligned controls

• Clear audit logs and ability to demonstrate who accessed what and when

• Business continuity plans to minimise disruption during cyber incidents

Even if you’ve never made a claim, your eligibility may be challenged if you can’t demonstrate the right IT controls.

The Risk of Non-Compliance

Cyber insurers have become more strict on exclusions. If your IT doesn’t meet the baseline requirements set out in the policy, your cover may be invalid — even if you’ve paid your premium.

That means in the event of a cyberattack, your claim could be rejected due to:

• Lack of MFA or endpoint protection

• Missing or untested backups

• Untrained users clicking on phishing links

What Firms Should Be Doing Now

• Review your current cyber insurance policy wording
• Conduct a cybersecurity audit focused on insurer requirements
• Partner with an IT provider that understands regulated sectors
• Document your processes, controls, and response plans
• Prepare for renewals well in advance — with evidence to support your risk profile

How LawFinity Can Help

At LawFinity, we help legal and finance firms build IT environments that not only reduce risk but also support cyber insurance eligibility.

We work with your leadership team to ensure:

• Your firm has the right systems, documentation, and audit trails

• You meet SRA, GDPR, and FCA-aligned expectations

• Your policy isn’t invalidated by simple IT oversights

Want to stress-test your IT setup before your next renewal?
Book a no-pressure consultation and let’s ensure your cover works when you need it most.