This error can occur if the user logon account is part of the Guest accounts or a limited-user account, if the security descriptor does not allow have the Authenticated Users to run Windows Update, or if the Impersonate a client after authentication policy is missing Service and Administrators from the Users and Groups list.
1) Start -> Run
2) Copy and paste the following command
sc sdset wuauserv D:(A;;CCLCSWRPWPDTLOCRRC;;;SY)(A;;CCDCLC
3) rerun windows update
