Enforce a DLP policy for Microsoft 365 Copilot

Description

A Microsoft Purview DLP policy on the Microsoft 365 Copilot and Copilot Chat location is turned on for all users, with at least two rules:

• Content contains > Sensitivity labels with the organization's highest labels (for example Highly confidential, Personal) and the action Prevent Copilot from processing content;
• Content contains > Sensitive information types with the types of CB-M365-DATA-001 and the action Prevent Copilot from processing content > Performing Web Searches (and Processing prompts where the business accepts it).

The Copilot location only exists in the Custom template and cannot be combined with other locations in the same policy. Blocking external email from Copilot grounding (preview) is a useful addition against prompt injection.

Rationale

Copilot works with the user's permissions, so oversharing problems become instantly visible through summaries and search. Excluding the most sensitive labelled content from Copilot processing limits that exposure, and blocking web grounding for prompts that contain personal identifiers prevents them from being sent to an external search provider.

Impact

Users cannot get Copilot answers based on excluded labelled items (they still appear in citations). The label rule needs a label taxonomy in place (CB-M365-DATA-005). Policy changes can take up to four hours to apply.

Applies when

Requires: Microsoft 365 Copilot

Audit

1. Sign in to the Microsoft Purview portal (https://purview.microsoft.com) as at least a Global Reader.
2. Browse to Solutions > Data Loss Prevention > Policies.
3. Find a policy with the Microsoft 365 Copilot and Copilot Chat location for all users, Status = On, and check its rules against the description.
4. Alternative in Security & Compliance PowerShell: Get-DlpCompliancePolicy | Format-List Name,Mode,Locations and Get-DlpComplianceRule -Policy <policy> | Format-List Name,ContentContainsSensitiveInformation,AdvancedRule,RestrictAccess (the Copilot location is exposed as an Applications location of type Copilot).
5. Fail if no enforced policy targets the Copilot location, or if it has neither a label rule nor a sensitive information type rule.

Remediation

1. Sign in to the Microsoft Purview portal with Purview Data Security AI Admin, Compliance Administrator or Compliance Data Administrator.
2. Browse to Solutions > Data Loss Prevention > Policies > Create policy > Custom > Custom policy.
3. On Locations, turn on Microsoft 365 Copilot and Copilot Chat only, for all users.
4. Add a rule Content contains > Sensitivity labels (highest labels) with Prevent Copilot from processing content.
5. Add a second rule Content contains > Sensitive information types (types of CB-M365-DATA-001) with Prevent Copilot from processing content > Performing Web Searches, and optionally Processing prompts.
6. Turn on policy tips with a link to the internal data handling page, run in simulation, then turn the policy on.

Rollback

Set the policy to simulation or off.

References

• Microsoft Purview DLP for Microsoft 365 Copilot Microsoft, vendor-doc, accessed 2026-10-24
• Maester MT.1175 Maester, tool, accessed 2026-10-24

Mappings

How this control relates to the other framework's: equivalent, stricter, looser, partial or related.

Related controls

• related CB-M365-DATA-001 Enforce a DLP policy for sensitive data in Exchange, SharePoint and OneDrive
• requires CB-M365-DATA-005 Publish sensitivity labels to all users
• related CB-M365-DATA-009 Detect risky AI usage with Insider Risk Management
• related CB-M365-TENANT-020 Restrict Copilot web search, agents and third-party AI providers

People and lifecycle