Cyberattacks are rising fast. In response, insurance companies are tightening the rules.
It’s no longer enough to simply buy a cybersecurity insurance policy.
Organizations need to meet stringent security requirements to demonstrate they’re taking steps to reduce the risks of an attack. From multi-factor authentication (MFA) to employee training and vulnerability management, insurance companies need proof you take cybersecurity seriously.
Let’s take a look at exactly what insurers want to see. We’ll look at which controls are non-negotiable and how to meet them without stretching your IT team too thin.
Cybersecurity insurance is a financial safety net for businesses, helping to protect against real-world losses from cyber attacks.
Today, 72% of C-level execs globally are concerned about a cyber attack. And for good reason. With the average data breach now costing upwards of $10 million in the U.S., the financial hit would devastate most businesses.
This is why over three-quarters of companies already carry some form of cyber liability insurance. And of the companies that don’t, 41% say it’s a top priority for their risk strategy.
Depending on the type of cyber insurance you have, payouts can cover expenses for:
But remember, cyber insurance isn’t a substitute for strong security. You'll need to prove you’ve implemented key cybersecurity controls before your policy is approved.
One of the biggest reasons businesses don’t carry cybersecurity insurance is surprisingly simple. They don’t understand the coverage.
In fact, 26% of companies say they didn’t even know cyber liability insurance existed. Others mistakenly believe it only benefits large organizations.
But this kind of ignorance leaves companies unprotected. Insurers can be extremely helpful toward the cost of breaches, but only if you meet the cybersecurity requirements they demand.
Here are nine of the most common insurance requirements and how they reduce cyber risk.
To insurers, MFA is non-negotiable. In fact, almost 80% of insurers require MFA across key systems.
These simple yet powerful access controls verify users with two or more methods, like a password and an SMS code.
And it’s not just because MFA can stop attackers from getting into your system. Even if someone was able to hack your system, MFA creates a barrier to stop them spreading across the system once inside.
Aside from offering protection against stolen credentials, it also supports compliance frameworks like NIST 800-63B and CMMC Level 2.
EDR tools monitor laptops, servers, and other endpoints in real time for suspicious behavior. They can detect, isolate, and neutralize threats before those threats can escalate.
Nowadays, 65% of insurers expect organizations to have EDR because it significantly reduces breach impact, while increasing cyber event response speed. It also aligns with compliance standards like CIS Controls.
If you don’t have copies of your data, you’re at risk of having to pay the ransom to get it back. This is expensive for insurance companies. And that’s without the costs associated with business interruption.
This is why a third of insurers now require offline or air-gapped backups that malware can’t encrypt. Plus, it’s essential to keep you compliant with NIST SP 800-34 contingency planning.
A documented incident response plan outlines how your team will detect, respond to, and recover from an attack.
Insurers need to see that you have this plan in place so your organization won’t fall into chaos if a cybersecurity event happens. This is also a requirement of both the HIPAA Security Rule and NIST SP 800-6.
Privileged access management controls who can access sensitive systems and how you track that access.
Asa a result, PAM helps reduce insider threat risks and the spread of a breach by limiting lateral movement. It’s a key component of NIST 800-53 AC-6 and a top requirement in insurance assessments.
More than a third of all ransomware incidents begin with phishing. To protect against this, insurers look for proactive filtering to block malicious attachments and links. These tools also align you with the FTC Safeguards Rule and SEC disclosure requirements.
Regular security awareness training helps staff identify phishing attempts, create strong passwords, and practice safe behaviors.
The majority (81%) of insurers require it, yet 46% of companies admit that a lack of cybersecurity training is their biggest weakness. And it’s not just an insurance requirement. It also satisfies CMMC and NIST 800-50.
Poorly patched systems are low-hanging fruit for attackers. More than half of insurers expect routine updates and regular vulnerability assessments to reduce the likelihood of a breach through an unpatched system.
It’s also a core part of NIST 800-40, and SOC 2 standards, as it helps close security gaps before hackers can exploit them.
Due to increased hybrid work and more complex supply chains, secure remote access is now essential. Insurers often look for Zero Trust Network Access (ZTNA) and tightly controlled VPNs to prevent network security failures.
These controls fall in line with CISA ZT guidance and other modern cybersecurity frameworks.
Cyberattacks are becoming more common, and they’re getting more destructive, more expensive, and harder to recover from.
If your business doesn’t have the right cyber liability insurance, you face a much higher level of risk.
Ransomware, phishing, and insider threats are all on the rise.
In Q1 2025 alone, the number of cyberattacks per organization grew 47%, averaging 1,925 weekly cyber incidents. In 2024, 47% of organizations experienced data breaches, while 42% reported online fraud, and 30% were hit by ransomware attacks.
And even though 97% of companies eventually recovered their encrypted data, 56% still paid a ransom. In 2024, the average ransom payout was $2 million.
And here’s where things get tricky.
Outdated cyber liability insurance policies don’t always cover modern threats. Some exclude ransomware payouts entirely, unless you can prove you have advanced cybersecurity controls in place.
When ransomware strikes, the damage is instant.
Over a third (40%) of businesses affected by ransomware say it immediately impacted day-to-day operations, and 25% reported severe disruptions.
If you don’t have the right cybersecurity insurance coverage, those losses stack up quickly and halt your ability to function as an organization.
Emerging AI-powered attacks are rewriting the rules of cyber threats.
In 2024, 26 new malware strains were identified, with many of those being developed or accelerated by AI.
And it’s not just that these threats are new. They’re also faster and more aggressive. In fact, AI-driven attacks have slashed the average breakout time to just 48 minutes.
It’s no surprise, then, that two-thirds of businesses say AI-generated threats are their top concern in 2025. Especially since legacy cyber insurance policies often fail to account for these risks.
Not only are cyber threats becoming more aggressive, but regulations are tightening as a response.
Laws like GDPR, HIPAA, and CMMC are getting stricter to force businesses to provide better protection for their customers — and failing to comply can be costly.
But the problem is that some policies now exclude coverage for regulatory penalties unless you can prove compliance. This means having a strict cybersecurity program that meets regulatory standards.
Poor cyber hygiene is a red flag for insurers.
Without the right measures in place, like endpoint detection or data backups, you can face higher premiums or even policy denial.
And even if you do manage to insure your company, if you suffer a cybersecurity incident and you can’t prove you had the right protections, your insurer may reject your claim outright. This results in you having to cover the recovery costs yourself.
But let’s say your insurer does approve your claim. If you’re found to be negligent in some security areas, this might result in a reduced payout.
On top of that, you face compliance issues. Without appropriate controls, a security breach can lead to steep regulatory fines and lawsuits.
A trusted managed security service provider (MSSP) brings the tools, systems, and experience to meet cyber insurance requirements quickly and effectively, without burdening your internal team.
They will guide you through insurer questionnaires and align every control with policy expectations, before deploying all essential protections like MFA, EDR, air-gapped backups, PAM, and ZTNA. And with built-in monitoring, audit-ready documentation, and multi-layered threat defense, MSSPs streamline claims and reduce disputes.
Plus, MSSPs already know the landscape, so they eliminate trial and error, making it a faster and more cost-effective path to compliance.
The result? Lower premiums, fewer gaps, and a stronger, provable cyber risk posture.
Cyber insurance helps soften the blow of a breach, but only if you meet the fine print. Since attacks are evolving so quickly, insurers are raising the bar with strong cybersecurity expectations.
Don’t wait for a claim to find out you’re not properly covered. Close the gaps before attackers find them. All Covered helps you meet, maintain, and exceed cyber insurance requirements with confidence. Let’s secure your business the smart way. Talk to an expert today.