Compliance Glossary
Definition

Cyber Insurance Compliance

Meeting the documented security requirements that cyber insurance carriers mandate as a condition of coverage and claims payment.

What It Means

Cyber insurance compliance refers to meeting the security documentation and control requirements that insurance carriers specify as conditions for coverage eligibility and claims payment. Carriers increasingly require applicants to demonstrate specific controls including multi-factor authentication, endpoint detection, written incident response plans, employee security training, and documented security policies (WISPs). Claims can be denied if the firm's actual security posture does not match what was represented on the insurance application.

Why It Matters for CPA Firms

The AICPA has noted that a significant number of CPA firms still lack a WISP despite attesting to having one during PTIN renewal. If your cyber insurance application says you have documented security controls but you cannot produce them during a claim, your carrier can deny coverage. With average breach costs for small businesses exceeding $100,000, a denied claim can be devastating. Maintaining documented compliance evidence is not just regulatory: it is financial self-protection.

Relevant Regulations

  • FTC Safeguards Rule
  • State Insurance Regulations
  • IRS Publication 4557

How Kompflow Helps

The Evidence Testing & AI Evaluation module handles this for your firm, personalized to your software, team size, and state requirements.

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