Why Cyber Insurance and Cybersecurity Go Hand in Hand for Today’s Businesses

Cyberattacks are no longer just a concern for large corporations. Small and mid-sized companies in industries like accounting, construction, and property management are just as vulnerable, often more so because they may lack the resources to recover quickly from an incident. 

In this episode of our business IT education series, Taylor Neves, Senior Cybersecurity Engineer at Capital Network Solutions (CNS), speaks with Justin Reinmuth, founder of TechRUG, a Lloyd’s of London cyber insurance underwriter. Together, they explore the growing need for cyber insurance, the emotional and financial toll of cybercrime, and why modern businesses must combine strong cybersecurity with comprehensive insurance coverage. 

Cyber Insurance: Why It’s a Must-Have in 2025 

Most companies today carry general liability and property insurance, but cyber coverage is still overlooked. That is starting to change as ransomware, wire fraud, and phishing scams become everyday threats. 

“Try unplugging your entire network for a day and see how your team operates,” Justin said. “That’s what happens during a breach, except now you have bad actors in the system and customers waiting for answers.” 

Cyber insurance helps businesses handle the financial fallout of an attack. It also provides access to attorneys, incident responders, forensic investigators, and PR professionals that small companies would not otherwise be able to afford. These services are essential for navigating a breach legally and operationally. 

Real-World Example: CPA Firm Phishing Attack 

A small Sacramento-based CPA firm with 12 employees thought they were secure. They had antivirus software and a basic firewall but did not enforce multi-factor authentication or conduct phishing training. 

One afternoon during tax season, a staff member received an email that appeared to come from a client. It included a link to “updated W-2s” for review. When clicked, the attacker harvested the employee’s Microsoft 365 credentials. Within an hour, the attacker gained access to the firm’s document repository and downloaded hundreds of files containing Social Security Numbers, 1099s, and bank account details. 

By the time CNS was contacted to help investigate, the data had already been sold on the dark web. Clients were being contacted by identity thieves. The firm had to notify the IRS, affected clients, and their cyber insurance provider. 

Because they had a comprehensive cyber policy, the firm received: 

• Legal guidance for regulatory reporting 

• Credit monitoring for impacted clients 

• PR support to preserve client trust 

• Coverage for forensic investigation and breach notification costs 

Without this coverage, the firm could have faced legal action and massive financial losses. They still lost some long-term clients, but the insurance allowed them to stay in business. 

Real-World Example: Property Management Wire Transfer Fraud 

A regional property management company overseeing 1,500 rental units was targeted through a phishing email that appeared to come from their bank. An accounts payable manager clicked a link, entered login credentials, and unknowingly gave an attacker access to the firm’s online banking system. 

The attacker initiated a series of wire transfers totaling over $265,000 to overseas accounts. It wasn’t caught until the next day when the accounting team noticed discrepancies during reconciliation. 

Because the company had a cyber liability policy with social engineering fraud coverage, they were able to recover most of the funds. The policy also covered: 

• Incident response and forensic investigation 

• Support from legal counsel to navigate compliance obligations 

• Changes to internal controls to prevent future fraud 

While the breach caused internal disruption and delayed payments to vendors, the insurance allowed the company to recover without laying off employees or defaulting on obligations. 

Top Threats Driving Cyber Insurance Claims 

Justin Reinmuth notes that the most common claims among small and mid-sized businesses fall into two categories: 

1. Ransomware
   Criminals encrypt your data and demand payment for a decryption key. These attacks can shut down operations for days and even infect backups, making recovery extremely difficult.
2. Cybercrime and Wire Fraud
   Attackers trick employees into transferring money, sharing login credentials, or clicking malicious links. These events are especially common in industries with frequent financial transactions or sensitive data.

As Justin explains, attackers don’t care if you’re a five-person accounting office or a construction firm with 30 staff. They look for weak security. If they find a vulnerability, they exploit it. 

Why Security and Insurance Work Best Together 

Insurance companies study claims data to identify the biggest areas of risk. Based on these findings, they now require stronger cybersecurity controls before issuing or renewing policies. 

Here are some of the most common requirements: 

• Multi-factor authentication for email, logins, and remote access 

• Role-based access control for administrative privileges 

• Endpoint detection and monitoring tools 

• Event logs and centralized alerting systems 

• Regular user awareness training for phishing and social engineering 

These requirements are not just red tape. They reflect the real-world tactics used by attackers—and help insurance providers avoid unnecessary claims. 

Taylor explains that CNS regularly helps clients meet these standards through proactive IT management and guidance during policy reviews. 

How Much Coverage Do You Need? 

Determining the right policy limit is difficult because no two cyber incidents are the same. A ransomware demand might be $25,000, or it could be $2 million. Fraudulent wire transfers, legal obligations, and operational downtime all add up quickly. 

Justin recommends comprehensive policies that include at least 20 insuring agreements and offer broad protection across scenarios. He also suggests leaning toward higher limits when budget allows. 

Taylor adds that a risk assessment and business impact analysis are essential for choosing the right level of coverage. Every business is different, and understanding where your biggest vulnerabilities are helps ensure you’re properly protected. 

What Happens After a Breach? 

When a cyber incident occurs, time is everything. 

Step 1: Notify your insurance carrier immediately
Step 2: Activate the incident response team provided by the insurer
Step 3: Work with your IT and legal teams to isolate, investigate, and respond
Step 4: Communicate with stakeholders and affected clients
Step 5: Implement updated security controls to prevent future breaches 

Failure to notify your carrier promptly may void your coverage, so make sure your team knows the proper procedure. 

The Emotional Toll of a Breach 

Financial loss is only part of the story. Business owners who suffer a breach often experience anxiety, stress, and even burnout. Prolonged claims can take months or years to resolve. 

“No one ever says, ‘Let’s go through that breach again,’” Justin says. “They just want it to be over.” 

Cyber insurance combined with expert IT support allows you to recover faster and with fewer long-term consequences. 

The Takeaway 

Whether you manage tax documents, rental properties, or construction projects, your business is a target for cybercriminals. A phishing email or missed software patch could lead to thousands of dollars in damages or worse, the loss of client trust and long-term revenue. 

Cyber insurance is no longer optional. It must be part of your company’s insurance portfolio, alongside cybersecurity measures like MFA, incident response plans, and user training. 

At Capital Network Solutions, we help companies reduce risk, meet compliance standards, and prepare for insurance audits. We are a Microsoft Partner with support aligned to SOC 2 standards, serving clients across industries that handle sensitive data. 

Request Your Free Risk Assessment 

🛡️ Not sure where to start? We offer a free risk assessment
We’ll evaluate your security posture and help you prepare for your next insurance renewal or the unexpected breach you hope never happens. 

Why Choose CNS? 

• Microsoft 365 experts with secure cloud configurations 

• Cybersecurity plans built for CPA firms, property managers, and contractors 

• Rapid support with 90-second average hold times 

• Compliance guidance tailored to your industry