I review client documentation as part of my fractional CTO work. In 2026, I started seeing the same problem everywhere: companies using security policy templates that stopped working years ago.
They didn’t know it yet.
The templates looked fine on paper. They had all the right sections. But when insurance declarations came out and new policy requirements landed, these templates created real exposure. Over 40% of cyber insurance claims were denied in 2024, often because policies didn’t match what insurers now require.
Until 2020, templates worked. After 2020, they became liabilities.
You can start with a template. You cannot make it your policy.
The Break Point Nobody Saw Coming
Between 2009 and 2012, I first encountered Written Information Security Plans in Massachusetts. Back then, compliance was straightforward: antivirus, firewall, passwords, physical security. Check the boxes, file the paperwork, move on.
The world looked different then.
By 2013-2016, cloud email and storage became common. Encryption expectations increased. Templates still passed audits if you updated them occasionally. They were aging, but they held up.
Then 2017-2019 happened. Phishing exploded. Credential theft became the primary attack vector. Training mattered. Access controls mattered. Identity started to matter more than perimeter security. Templates that only added tools but ignored governance began failing reviews.
2020 changed everything.
Remote work exploded overnight. Cloud identity and SaaS became where your data actually lived. Policies written for office-based, perimeter-security models became structurally inadequate for distributed, cloud-first operations.
If your policy didn’t explicitly cover remote users, cloud storage, and identity controls, you were non-compliant by omission.
What Actually Changed
In October 2021, the FTC strengthened the Safeguards Rule with nine specific mandatory requirements. Not suggestions. Requirements.
You now need:
- A designated Qualified Individual
- Multi-factor authentication implementation
- Risk assessments
- Service provider oversight
- Monitoring and incident response protocols
The compliance deadline was June 9, 2023. Any policy written before this date that hasn’t been substantially revised is legally inadequate.
Then in October 2023, the FTC added mandatory breach notification requirements for incidents affecting 500 or more people within 30 days. These took effect in May 2024.
Generic templates began failing enforcement and insurance underwriting.
In 2024, the IRS updated Publication 5708 with dramatically expanded requirements. Mandatory MFA for all system access, not just remote. Presumption of breach if encryption keys are compromised. Mandatory 30-day FTC reporting for security events affecting 500 or more people.
The IRS integrated compliance into PTIN renewal through Form W-12, Question 11. Tax practitioners now certify under penalty of perjury that they maintain compliant security plans. The IRS cross-references these certifications against reported security incidents and revokes credentials for preparers who certified compliance but couldn’t produce documentation.
That’s not theoretical risk. That’s license revocation.
The Template Trap
Templates fail audits because they don’t match your actual operations.
I see this constantly. A company downloads a template, fills in their name, and files it. The policy says they conduct quarterly risk assessments. They don’t. It says they have an incident response team. They don’t. It says they monitor all system access. They don’t.
Audit findings are most commonly related to incomplete documentation or policies that don’t reflect actual practices. When your written policy describes theoretical controls you don’t actually have, that inconsistency raises immediate red flags.
Auditors and insurance underwriters now actively flag vendor-named templates, static URLs, and checklist language as evidence of non-compliance.
Your policy must reflect your actual practices, not theoretical ones.
What Insurance Companies Actually Check
Insurance underwriting has fundamentally changed. Insurers moved from “Do you have security?” to “Prove it, continuously.”
When they investigate a claim, they look for proof that required controls were active at the time of the incident. They want:
- Documented proof of ongoing training
- MFA implementation records
- Incident response plans that were actually tested
- Backup verification logs
- Clear audit trails
Without these, auditors assume the control is not in place or not operating effectively.
Even small lapses give insurers grounds to deny coverage after a breach. Policy language specifically includes “failure to maintain” exclusions that preclude coverage for claims arising from failure to maintain minimum or adequate security standards.
Approximately 27% of cyber insurance claims are either denied or only partially paid, primarily due to policy exclusions and failure to meet security requirements.
That’s not a small number.
My Policy Audit Checklist
When I review a client’s security policy, I check seven sections first. These are where I consistently find gaps that create real exposure.
1. Identity and Access Management
Does your policy explicitly require MFA for all system access? Not just remote access. All access. If your policy says “strong passwords,” that’s outdated language. You need specific MFA requirements documented.
2. Cloud and SaaS Controls
Does your policy cover cloud storage, SaaS applications, and third-party services? If your policy only mentions “network security” and “firewalls,” it was written for a perimeter-based model that no longer exists.
3. Remote Work Provisions
Does your policy explicitly address remote users, home networks, and distributed access? If it assumes everyone works from an office, it’s non-compliant by omission.
4. Service Provider Oversight
Does your policy require documented oversight of third-party service providers? This means contracts, security assessments, and ongoing monitoring. Not just “we use vendors.”
5. Incident Response and Notification
Does your policy include specific breach notification timelines and procedures? You need 30-day FTC reporting for incidents affecting 500 or more people. If your policy is silent on this, you’re non-compliant.
6. Risk Assessment Cadence
Does your policy specify how often you conduct risk assessments and what they cover? “Annual review” is not sufficient. You need documented methodology and evidence.
7. Designated Qualified Individual
Does your policy name a specific person responsible for your security program? This is a regulatory requirement. “IT Department” is not a person.
If any of these sections are missing or use vague language, you have a gap.
What Enterprise-Wide Actually Means
Jurisdictions now require comprehensive, enterprise-wide policies. This doesn’t mean longer documents. It means your policy must cover all systems, all data, all users, and all locations.
In practice, this means:
- Your policy applies to employees, contractors, and third-party service providers
- It covers on-premise systems, cloud services, and SaaS applications
- It addresses office locations, remote work, and mobile access
- It includes data at rest, in transit, and in use
If your policy only covers “company systems” or “network resources,” you’re missing entire categories of exposure.
Product Declarations Versus Policy Statements
Early policies were product declarations. “We use Norton Antivirus. We have a Cisco firewall.” That approach no longer works.
Modern policies need to describe controls, not products. Instead of “We use Norton Antivirus,” you write “We maintain endpoint protection on all devices with automatic updates and centralized management.”
This matters because products change. Your firewall vendor might change. Your antivirus might change. But your control requirement stays the same.
Policy language needs to be product-agnostic and control-focused.
The Review Cadence Question
How often should you update your policy?
The real answer: whenever your operations change, regulations change, or your risk profile changes.
The practical answer: at minimum annually, with triggered reviews when you add new systems, change service providers, or face new regulatory requirements.
Organizations that treat compliance as a once-a-year event fall behind. You need continuous awareness of configuration drifts, new vulnerabilities, and control failures that occur between audits.
Auditors increasingly look for evidence of continuous compliance, not just point-in-time snapshots.
Documentation That Actually Proves Compliance
Your policy document is not proof of compliance. It’s a statement of intent.
Proof of compliance is:
- MFA enrollment logs showing when users activated multi-factor authentication
- Training completion records with dates and topics covered
- Risk assessment reports with findings and remediation status
- Incident response test results showing you actually ran tabletop exercises
- Backup verification logs proving your backups work
- Service provider contracts with security requirements
- Access review logs showing you periodically verify who has access to what
Without these audit trails, your policy is just words on paper.
What This Means for You
If your security policy is more than two years old and hasn’t been substantially revised, you likely have gaps.
If your policy came from a template and you haven’t customized every section to your specific operations, you have gaps.
If your policy doesn’t explicitly cover remote work, cloud services, MFA requirements, and breach notification procedures, you have gaps.
These gaps create real exposure. Insurance claim denials. Failed audits. Contract liability. License revocation for regulated professionals.
The fix is not complicated, but it requires work. You need to:
- Review your current policy against current regulatory requirements
- Document your actual security controls and practices
- Update policy language to match your operations
- Create the audit trails that prove compliance
- Establish a review cadence that keeps your policy current
This is not optional work. This is baseline operational hygiene.
Your policy needs to reflect reality. Your documentation needs to prove it. Your review process needs to keep it current.
Anything less creates exposure you can’t afford.
