azure-policy

name	azure-policy
description	Guidance for Azure Policy — enforcing and auditing governance and security guardrails at scale across Azure with definitions, initiatives, assignments, and remediation tasks. Covers effects (Audit, Deny, Append, Modify, DeployIfNotExists, AuditIfNotExists), management group inheritance, audit-first rollout, parameterised reusable policies, and exclusion discipline. Powers Defender for Cloud regulatory compliance. WHEN: Azure Policy, governance guardrails, enforce compliance, policy initiative, deny resource, audit configuration, remediation task, deployIfNotExists, management group policy, security baseline enforcement, MCSB initiative, regulatory compliance Azure. DO NOT USE for resource RBAC role choice (use azure-role-selector), Defender posture only (use defender-for-cloud-hardening), or Bicep / IaC templating.
license	MIT
metadata	{"author":"Microsoft","version":"0.1.0"}

Azure Policy

Azure Policy enforces organisational standards and assesses compliance at scale, auditing or preventing non-compliant resource configurations and remediating drift automatically. It's the preventive control plane for an Azure estate and the engine behind Defender for Cloud regulatory compliance.

When to use

Implementing preventive and detective governance / security guardrails across subscriptions and management groups. Use this skill to pick effects, design initiatives, and roll out safely.

Do not use this skill for RBAC role choice (azure-role-selector), Defender posture (defender-for-cloud-hardening), or Bicep / IaC templating.

Pick the policy effect by goal

Goal	Effect	Notes
Surface non-compliant resources without blocking	Audit	Reporting only; default starting point
Block creation / update of non-compliant resources	Deny	Preventive; test in Audit first
Add a required tag / property automatically	Modify (or Append)	Mutates the request
Deploy a missing related resource (e.g. diagnostic settings)	DeployIfNotExists (DINE)	Managed identity required
Surface a missing related resource	AuditIfNotExists (AINE)	Reporting only
Conditional logic across many resources	Initiative	Group multiple policies
Block guest user creation / specific SKUs	Deny + parameter	Parameterise allowed SKUs
Enforce Defender for Cloud baseline	Built-in MCSB initiative	Don't author your own

Rule of thumb: start with Audit on every new policy for 14-30 days. Review compliance. Move critical controls to Deny. Use DeployIfNotExists for things that should "just be there" (diagnostic settings, defender agents). Never start with Deny tenant-wide.

Approach

1. Use built-in initiatives where they exist — Microsoft Cloud Security Benchmark (MCSB) is the default. Add regulatory initiatives (CIS, ISO 27001, NIST 800-53, PCI DSS, HIPAA) per compliance scope. Verify: MCSB initiative assigned at root management group; compliance state visible in Defender for Cloud.

2. Author custom definitions only where built-ins don't exist — Custom policy as ARM JSON: policyRule (condition + effect), parameters (reusable inputs), metadata (category). Keep policies single-purpose; group via initiatives.

3. Initiatives = grouped policies — Bundle related policies (e.g. "Enterprise security baseline" initiative containing 30 policies). Assign initiatives, not individual policies, for manageability.

4. Scope at management group — Assign at management group for inheritance across child subscriptions. Use exclusions sparingly with documented justification. Verify: assignment scope visible in policy compliance; child subscriptions inherit.

5. Roll out: Audit → review → Deny — Assign as Audit first. Wait 14-30 days, pull non-compliance list, work with workload owners to remediate or document exceptions. Then switch the assignment to Deny. Verify: non-compliance count down to acceptable baseline before the Deny switch; workload owners notified.

6. Remediate existing resources with remediation tasks — DeployIfNotExists and Modify policies only act on new / updated resources. Use remediation tasks to bring existing resources into compliance. The policy assignment's managed identity performs the change. Verify: remediation task created post-assignment; success rate > 95%; failures triaged.

7. Monitor + integrate with Defender for Cloud — Compliance state is the daily dashboard. Defender for Cloud uses policies for its recommendations - failing recommendation = failing policy.

Guardrails

• Test Deny policies in audit first - a broad Deny can block legitimate deployments and pipelines. First Deny at midnight = production deployment blocked at 09:00.
• Use parameters to make policies reusable across environments. Hard-coded regions / SKUs / tag values = one policy per environment, drift guaranteed.
• Don't over-exclude; each exclusion weakens the guardrail and should be justified. Exclusions are an exception list - document the why, expire them.
• DeployIfNotExists needs a managed identity with the right role. Without the right RBAC on the assignment's identity, remediation silently fails.
• Don't author what's already built in. MCSB / regulatory initiatives are maintained; custom copies drift from Microsoft guidance.
• Policy != RBAC. Policy controls resource configuration; RBAC controls who can act. Both layers needed.

Common anti-patterns

• "Deploy Deny tenant-wide on day one" - First production deployment fails. Audit first.
• "One policy per environment, copy-paste" - Hard-coded params, maintenance hell. Parameterise + one assignment per env.
• "Skip the MCSB initiative - we have our own" - Yours drifts; MCSB is Microsoft- maintained.
• "Exclude the subscription that fails compliance" - Hides the problem. Fix or formally accept the risk.
• "DeployIfNotExists without remediation task" - Existing resources stay non-compliant forever; only new ones get the configuration.
• "Custom JSON without testing" - First assignment of a syntax-error policy = no effect, no warning. Test in a sandbox subscription first.

Example prompts

• Create an Azure Policy initiative to enforce a security baseline at the management group scope.
• How do I deny non-compliant resources and auto-remediate with DeployIfNotExists?
• Apply governance guardrails at the management group scope with inheritance.
• Audit resource configuration before switching policies to Deny.
• Parameterise an allowed-locations policy for reuse across dev / test / prod.
• Build a remediation task to bring existing resources into compliance.

Microsoft Learn

• Azure Policy overview: https://learn.microsoft.com/azure/governance/policy/overview
• Policy effects: https://learn.microsoft.com/azure/governance/policy/concepts/effects
• Initiatives (policy sets): https://learn.microsoft.com/azure/governance/policy/concepts/initiative-definition-structure
• Remediation tasks: https://learn.microsoft.com/azure/governance/policy/how-to/remediate-resources
• Management group scope: https://learn.microsoft.com/azure/governance/management-groups/overview
• Microsoft Cloud Security Benchmark: https://learn.microsoft.com/security/benchmark/azure/overview
• DeployIfNotExists pattern: https://learn.microsoft.com/azure/governance/policy/how-to/programmatically-create
• Policy compliance: https://learn.microsoft.com/azure/governance/policy/how-to/get-compliance-data