Cyber Insurance: What Business Leaders Should Know

Risk transfer is not a shortcut it’s a strategy.

Cyber incidents are costly. Ransomware, data breaches, and business email compromise can lead to millions in losses. Many organizations turn to cyber insurance to offset financial risk. But policies are changing. Insurers now demand strong security controls before issuing coverage or paying claims.

Key Takeaways

• Cyber insurance is not a replacement for security.
• Coverage varies widely read the fine print.
• Strong controls lower premiums and prevent claim disputes.
• Insurers increasingly require proof of compliance.

What Cyber Insurance Covers

• Incident response costs (forensics, legal, PR).
• Data breach expenses (notification, credit monitoring).
• Business interruption losses (downtime revenue impact).
• Ransomware payments (subject to legal restrictions).
• Third-party liability (claims from customers or partners).

Common Exclusions

• Acts of war or terrorism.
• Insider threats or employee negligence.
• Failure to maintain minimum security standards.
• Prior known vulnerabilities not remediated.

Coverage vs. Exclusions Table

How Premiums Are Calculated

Insurers assess:

• Industry risk profile.
• Company size and revenue.
• Past incident history.
• Security posture MFA, backups, training, compliance.

Meeting Insurance Requirements

• Documented security policies.
• Regular vulnerability scans and patching.
• Phishing simulations and awareness training.
• Incident response and disaster recovery plans.
• Compliance with frameworks like ISO 27001 or NIST.