The Guide to Cyber Insurance: What You Need to Qualify (and Save)

Introduction

Cyber insurance used to be a checkbox. Today, it is a battleground. Carriers have tightened their requirements, premiums are on the rise, and coverage exclusions are more aggressive than ever. Many companies find themselves unprepared, with no clear roadmap on how to qualify or reduce their costs.

This guide breaks down exactly what cyber insurance providers look for and how your company can meet those requirements with confidence. We also highlight how a well-built security foundation can lead to real savings on your premium.

Why Cyber Insurance is Getting Harder to Obtain

Over the past five years, the number of cyber insurance claims has surged due to ransomware, business email compromise, and data breaches. Insurers have responded by increasing scrutiny on applicants and demanding evidence of baseline cybersecurity controls.

Here are a few scenarios playing out in real time:

• A company applies for cyber insurance and is rejected outright because they do not have MFA enabled for remote access and email accounts.
• A renewal quote increases by 70 percent because the organization has not conducted a recent risk assessment or implemented endpoint detection.
• After a breach, a company discovers their claim is partially denied because they lacked the controls listed in the coverage fine print.
• Insurers are no longer relying on questionnaires alone. Many now require formal third-party assessments or audits before issuing or renewing a policy.

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What Insurers Expect Before They Will Offer Coverage

Cyber insurers typically look for the following controls as the baseline for issuing a policy:

Multifactor Authentication (MFA)
Insurers expect MFA to be enforced for all administrative accounts, remote access, email, and cloud platforms such as Microsoft 365, AWS, or Google Workspace. This is considered a non-negotiable control.

Example: If a company uses Microsoft 365 without MFA, it is often excluded from coverage or must pay significantly higher premiums.

Endpoint Detection and Response (EDR)
Legacy antivirus is no longer sufficient. Insurers look for behavior-based detection platforms that provide visibility, alerting, and response capabilities across all endpoints.

Example: CrowdStrike, SentinelOne, and Microsoft Defender for Endpoint are commonly accepted tools.

Data Backups with Immutability and Testing
You must be able to demonstrate that critical systems are backed up regularly and that those backups are both immutable and tested for restoration. Offsite or cloud backups that cannot be altered or deleted during a ransomware attack are preferred.

Example: A company using Veeam with immutable storage in AWS S3 and annual recovery testing will meet this standard.

Access Controls and Privilege Management
Insurers expect that admin privileges are limited and controlled. This includes disabling dormant accounts, removing local administrator rights from standard users, and reviewing access regularly.

Example: A midsize firm that removes local admin from employees and enforces least privilege across departments may qualify for discounts.

Incident Response Plan and Tabletop Testing
Insurers want to know that you have a formal incident response plan that has been tested in the last 12 months. They may ask to see the document and evidence of testing, such as notes from a tabletop exercise.

Example: A firm that can show a documented IR plan and recent testing may unlock better rates or coverage terms.

Security Awareness and Phishing Training
Human error is a leading cause of cyber incidents. Insurance applications ask whether your employees are trained regularly on identifying phishing emails, reporting suspicious behavior, and understanding their security responsibilities.

Example: A company that uses KnowBe4 or similar training platforms and conducts quarterly phishing simulations is better positioned than one that only sends out annual policy reminders.

Important: Even if you purchase a cyber insurance policy, claims can still be denied if these controls are missing. Security awareness training, for instance, is commonly tied to policy language and exclusions. If a breach occurs and the investigation reveals that your team never received training, the insurer may reduce or deny payment.

How to Prepare for the Application or Renewal Process

If your company is applying for cyber insurance for the first time or renewing an existing policy, here is what to do:

1. Conduct a formal cyber risk assessment
   Identify your current gaps, document existing controls, and develop a remediation plan. This assessment can serve as supporting evidence during underwriting.

2. Review your existing security policies and procedures
   Ensure your policies reflect current practices, especially for access management, backups, and incident response.

3. Work with your broker early
   Brokers can provide questionnaires ahead of time and help you understand which controls matter most to specific carriers.

4. Engage with a security partner if needed
   A third-party advisor can help you prioritize controls, implement critical changes, and even communicate with the insurer on your behalf.

Better Security Often Means Lower Premiums

Improving your security posture does more than qualify you for coverage. It can also reduce your risk classification and premium costs. Some carriers offer premium credits for implementing specific controls or completing third-party security assessments.

Insurers are in the risk business. The less risk you present, the better your terms.

Real-world example: One client saw a 22 percent reduction in their renewal quote after implementing MFA, enabling EDR across all laptops, and demonstrating annual backup recovery testing.

Closing Thoughts

Cyber insurance is evolving. It is no longer about checking a few boxes. It is about demonstrating that you are actively managing your cyber risk in a measurable, verifiable way.

Organizations that take a proactive approach starting with a formal risk assessment and addressing high-priority gaps not only improve their security but also increase their chances of qualifying for coverage, reducing exclusions, and saving on premiums.

If your company needs help preparing for cyber insurance or remediating known gaps, we can help you build a plan, implement critical controls, and put you in the strongest position for coverage.

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