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Introduction:
A stark reality is emerging in the cyber insurance market: having a policy in place does not guarantee a payout. Based on recent claims patterns and the UK Cyber Security Breaches Survey 2025, insurers are increasingly conducting forensic audits of policyholders’ IT environments following a breach. These audits compare the security controls declared on the initial proposal form against the live configuration of networks, endpoints, and financial workflows. When discrepancies arise—such as MFA only being partially implemented or untested backups—insurers are leveraging “basis of contract” clauses to deny or reduce payouts, leaving businesses financially exposed during their most critical hour.
Learning Objectives:
- Understand the critical gap between declared security controls and actual IT implementation that leads to claim denials.
- Learn how to conduct a pre-renewal audit to align your infrastructure with insurance requirements.
- Master the technical verification of common policy declarations, including MFA scope, backup integrity, and segregation of duties.
You Should Know:
- The MFA Gap: Partial Implementation is a Total Failure
The original post highlights a critical pattern: organizations mark “MFA in place” on their forms, but it is only enabled for email, not for remote access or administrative tools. Insurers now check for this specifically.
Step‑by‑step guide to auditing MFA scope:
To verify that your Multi-Factor Authentication coverage matches your declaration, you must audit all administrative interfaces and remote access points.
Linux/Network Device Audit (SSH):
Check if MFA (like Google Authenticator or Duo) is enforced for SSH:
Check if MFA is required in SSH config sudo cat /etc/ssh/sshd_config | grep -i "AuthenticationMethods" Expected output: AuthenticationMethods publickey,keyboard-interactive If this line is missing or only shows "publickey", MFA is not enforced.
Windows/RDP Audit (Using PowerShell):
Verify Network Level Authentication (NLA) and MFA requirements for RDP:
Check RDP security layer on a remote server Get-WmiObject -Class Win32_TSGeneralSetting -Namespace root\cimv2\terminalservices -Filter "TerminalName='RDP-tcp'" | Select-Object SSLCertificateSHA1Hash, UserAuthentication UserAuthentication should be "1" (Require NLA). For Azure MFA for RDP, check the NPS extension logs.
Cloud/VPN Audit (OpenVPN/WireGuard):
For VPN appliances, verify that MFA is forced for all users, not just admins.
Example for Duo MFA integration check (Linux) sudo grep -r "duo_integration_key" /etc/openvpn/ Ensure the Duo script is called in the server config and not bypassed for specific subnets.
2. Backup Integrity: The “Regular Backups” Lie
Declaring “regular backups” is insufficient if you have never performed a test restore of the finance system. Insurers are asking for restore logs, not just backup logs.
Step‑by‑step guide to validating backup recoverability:
You need to prove that your backups are not only running but are restorable in a disaster scenario.
Simulate a restore for critical systems (Linux – using rsync or Bacula):
Do not just test a small file. Simulate a full restore of a database to a sandbox environment.
Example using Bacula to restore the most recent backup to an alternate location echo "restore client=finance-server-fd yes current all" | bconsole After restore, verify the integrity of the restored data mysql -u root -p -h sandbox-db-server restored_finance_db -e "SELECT COUNT() FROM general_ledger;"
Windows (Veeam or Windows Server Backup):
Use PowerShell to check the last successful restore point and attempt a file recovery.
For Veeam, use Veeam PowerShell snap-in Get-VBRBackup | Get-VBRRestorePoint -Last | Format-Table Name, CreationTime, Consistent Then, perform an instant file-level restore to verify accessibility. Start-VBRInstantRecovery -RestorePoint $restorepoint -Path "E:\TestRestore"
3. Dual Approval: The Friday Afternoon Bypass
The post mentions a single person changing bank details on a busy Friday, despite “dual approval” being in policy documents. This is a process failure that becomes an insurance exclusion (often for “Fraud” or “Social Engineering”).
Step‑by‑step guide to technical enforcement of segregation of duties:
You must configure your ERP or financial software to technically prevent single-user changes, regardless of the day or time.
Linux/ERP Configuration (Example with Odoo/PostgreSQL):
If using an open-source ERP, you can audit the logs for payment changes by a single user.
-- Connect to your ERP database (PostgreSQL) SELECT create_date, user_id, old_value, new_value FROM audit_log WHERE field_name = 'bank_account' AND EXTRACT(DOW FROM create_date) = 5 -- Friday AND user_id = operator_id ORDER BY create_date DESC;
If this query returns results, your technical controls are failing.
Windows/Active Directory (For File Shares/Finance Folders):
Ensure that modify permissions for finance folders require two distinct authorized users to approve changes (using RMS or Dynamic Access Control).
Check for permission inheritance breaking on critical finance folders Get-Acl -Path "D:\Finance\Vendors" | Format-List Look for AccessRule where IdentityReference is a single user with "Modify" rights. This should not exist.
4. Endpoint Protection: The Contractor Blind Spot
Declaring endpoint protection while contractors and older kit sit outside central management is a common pitfall. Insurers will look for devices not enrolled in your EDR/XDR solution.
Step‑by‑step guide to identifying unmanaged endpoints:
Scan your network for devices that do not communicate with your security console.
Linux (Nmap scan for unmanaged devices):
Compare live hosts against your EDR inventory list.
Scan your network for live hosts sudo nmap -sn 192.168.1.0/24 | grep "Nmap scan" > live_hosts.txt Compare with your EDR list (exported to edr_hosts.txt) grep -v -f edr_hosts.txt live_hosts.txt The output shows devices on the network not reporting to your EDR.
Windows (PowerShell – Check for missing agents):
Query Active Directory for computers that haven’t checked in with your security tool.
Check for CrowdStrike Falcon last check-in via registry (if possible remotely)
$computers = Get-ADComputer -Filter | Select-Object -ExpandProperty Name
foreach ($pc in $computers) {
if (Test-Connection $pc -Count 1 -Quiet) {
$session = New-PSSession -ComputerName $pc -ErrorAction SilentlyContinue
if ($session) {
Invoke-Command -Session $session -ScriptBlock {
Get-ItemProperty -Path "HKLM:\SOFTWARE\CrowdStrike" -ErrorAction SilentlyContinue
}
Remove-PSSession $session
} else { Write-Host "$pc is online but no admin access or agent missing." }
}
}
5. Remote Access: The Hidden Admin Tools
MFA on the main VPN is common, but what about jump boxes, OOB management cards (iLO, DRAC), or legacy RDP ports exposed to the internet? Insurers are scanning for these.
Step‑by‑step guide to hardening all administrative paths:
You must identify and secure every possible route into your network.
External Attack Surface Audit (Linux – using curl and openssl):
Simulate what an insurer (or attacker) sees from the outside.
Check for exposed RDP ports on your public IPs nmap -p 3389 <YOUR_PUBLIC_IP_RANGE> -Pn Check for exposed Dell iDRAC/HP iLO interfaces (common ports 443, 5900) nmap -p 443,5900 <YOUR_PUBLIC_IP_RANGE> -Pn --script http-title | grep -i "idrac|ilo"
If these are exposed, they must be protected by a VPN or bastion host with MFA.
6. The Proposal Form: A Technical Gap Analysis
The final step is to treat your insurance proposal form as a configuration file. You must version-control your security posture.
Step‑by‑step guide to aligning IT documentation with insurance declarations:
Create a “living document” that maps each insurance question to a technical verification script.
Create a verification script (Bash/PowerShell hybrid):
This script can be run quarterly to prove your posture matches your declarations.
!/bin/bash insurance_audit.sh echo "Checking MFA for all admins..." Extract all admin users from /etc/group and check if they have MFA tokens for user in $(grep '^sudo:' /etc/group | cut -d: -f4 | tr ',' ' '); do if [ ! -f "/home/$user/.google_authenticator" ]; then echo "FAIL: Admin $user does not have MFA configured." fi done echo "Checking last backup restore test..." Check the log of the last restore test (should be < 30 days) tail -1 /var/log/restore_test.log
What Undercode Say:
- Key Takeaway 1: Cyber insurance is no longer a financial safety net; it is a compliance enforcement mechanism. The proposal form is a legally binding representation of your technical architecture. Any divergence between the form and reality is a potential denial vector.
- Key Takeaway 2: The responsibility for claimability now sits squarely with the technical teams. IT must treat the insurance renewal cycle as a hardening exercise, verifying MFA scope, backup integrity, and access controls with the same rigor as a compliance audit (PCI-DSS, SOX).
- Analysis: The market shift described is fundamentally about transferring risk back to the insured. By scrutinizing declarations, insurers are forcing organizations to internalize the cost of poor cyber hygiene. The days of “check-the-box” security are over; now, the box must be technically verifiable. This demands a cultural shift where CFOs and CISOs collaborate to map policy wordings to firewall rules and IAM policies. The organizations that will survive a ransomware event are those that have already survived a mock claims audit.
Prediction:
Within the next 12 to 18 months, we will see the rise of “Continuous Insurance Underwriting.” Insurers will require API-based read-only access to policyholders’ EDR consoles, cloud configurations (via CSPM), and backup orchestration tools to validate compliance in real-time. Annual proposal forms will become obsolete, replaced by dynamic risk scoring based on live telemetry. Businesses that fail to provide this level of transparency will face either prohibitive premiums or outright denial of coverage.
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Reported By: Sagi Saltoun – Hackers Feeds
Extra Hub: Undercode MoN
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