Cyber Insurance

Cyber insurance provides financial protection against losses from cyber incidents including data breaches, ransomware, and business interruption.

Cyber insurance transfers financial risk from cyber incidents to an insurance carrier.

Coverage types: - First Party: Your direct losses - Incident response costs - Business interruption - Ransomware payments - Data recovery - Third Party: Liability to others - Regulatory fines - Legal defense - Customer notification - Credit monitoring

Underwriting requirements: - Security questionnaire - Vulnerability scans - MFA for remote access - EDR deployment - Backup and recovery

Premiums have increased significantly; strong security posture reduces costs.

Why It Matters

Cyber insurance premiums have skyrocketed, and insurers now require baseline security controls like MFA and EDR just to qualify for coverage. The average data breach costs $4.88 million—without insurance, a single incident can threaten business viability. However, insurance is not a substitute for security; claims can be denied if organizations fail to maintain the security posture they attested to during underwriting.

Key Points

Covers incident response costs and losses

MFA and EDR often required for coverage

Ransomware payments increasingly controversial

Premium costs driven by security posture

Not a substitute for security controls

Applicable Compliance Frameworks

SOC 2 ISO 27001

Related Terms

Incident Response

Incident response is a structured approach to preparing for, detecting, containing, and recovering from security incidents while minimizing damage.

Ransomware

Ransomware is malicious software that encrypts victim data and demands payment for the decryption key, often with threats to publicly release stolen data.

Risk Assessment

A risk assessment is a systematic process of identifying, analyzing, and evaluating potential threats to an organization's information assets.