When someone from a cyber liability insurance carrier told me, “You need to make sure your financial controls are in place,” I’ll admit—my first thought was, “Sure, we pay our insurance bill on time.”

But that’s not what they meant.

They were talking about internal financial controls—the kind that protect your business from fraud, wire transfer scams, invoice manipulation, and yes, cyber incidents.

And here’s the kicker:
These financial processes are now a key part of cyber insurance underwriting. If you don’t have them, you may not qualify for coverage… or you might pay more than you should.

What Are Financial Controls?

At a basic level, financial controls are checks and balances around how money moves through your business. For most SMBs, this means:

✅ The person who pays the bills is not the same person who reconciles the bank account
✅ Large or unusual payments require approval from someone else
✅ You verify banking changes with a phone call—not just an email
✅ There’s a clear process for handling vendor invoices and ACH payments
✅ Suspicious requests (especially urgent ones) trigger extra review

If you’ve ever heard of business email compromise (BEC), this is exactly the kind of thing that protects you. It’s one of the most common and costly types of cyber incidents in small and mid-sized firms.

Why Insurance Carriers Care

Because these attacks often don’t involve hacking at all.

Someone gets into your email (or fakes it), sends a convincing message asking your bookkeeper to change a payment method, and boom—funds are gone.

No malware. No ransomware. No firewall was bypassed.

Just one breakdown in your internal controls.

And if you can’t show the insurance carrier that you had a process in place? You may have a harder time getting coverage—or getting paid.

What Small Firms Can Do

Even if you only have one or two people handling money, here’s where to start:

• 🔄 Segregate duties: No single person should control the whole payment process

• ✅ Require dual approval: Especially for payments over a set threshold

• 📞 Verify vendor changes: Always outside the email thread

• 📊 Audit trails: Use accounting software that logs who approved what

• 📄 Write it down: Even a simple 1-page control policy makes a big difference

Want to See a Simple Controls Template?

We’ve created a sample Financial Controls Checklist for SMBs—based on what insurers want to see and what actually protects your firm.

📥 Let me know if you’d like a copy

Bottom Line:
Cybersecurity isn’t just about firewalls and passwords. Sometimes, it’s about who’s watching the bank account—and how.

If you’d like help reviewing your firm’s readiness (both technical and operational), we’d be glad to help.