Why Contractors Are Getting Denied Cyber Insurance in 2026

Cyber insurance underwriting has tightened significantly over the past several years. Contractors and infrastructure firms that previously obtained policies with minimal review are now facing increased scrutiny.

Insurance carriers are no longer focused solely on revenue and loss history. They are requiring formal cybersecurity governance documentation before issuing or renewing policies.

The Most Common Reasons for Denial

1. Missing written cybersecurity policies

2. No documented incident response plan

3. Lack of vendor cybersecurity controls

4. No formal breach notification procedure

5. Incomplete documentation submitted during underwriting

For many contractors, the issue is not actual security failure — it is documentation failure.

Carriers expect to see structured policies aligned with recognized frameworks such as NIST. Without them, applications are flagged as high risk.

What Insurance Carriers Expect to See

At minimum:

• Information Security Policy

• Incident Response Plan

• Data Breach Notification Plan

• Vendor Cyber Risk Policy

• Executive-level compliance summary

These documents demonstrate governance and preparedness, even if the organization is not operating a large internal IT department.

The Bottom Line

Cyber insurance is no longer optional for firms working with municipalities, infrastructure projects, or government contracts.

Documentation is now part of underwriting — not an afterthought.