Cyber insurance has become a critical safeguard for organizations of all sizes—but understanding and securing the right policy is more complicated than ever.
In a recent conversation with James Sanborn, CIC, CRM, of Allen Insurance & Financial, we explored the evolving challenges businesses face when securing or renewing cyber insurance. James shared practical insights on why today's policies demand more than coverage—they require proof of cyber maturity.
As he put it: "It's no longer about just having insurance—it's about proving you've earned it.”
Here's what business leaders need to know to stay insurable and resilient in 2025 and beyond.
Cyber insurance was once a relatively straightforward offering. Policies were limited in scope, premiums were based largely on revenue brackets, and underwriting involved answering just a handful of questions. That's no longer the case.
Today's cyber insurance is a highly scrutinized, data-driven product. Insurers have responded to a surge in cyber incidents—particularly following the rise in remote work stemming from the COVID-19 pandemic—by tightening eligibility, refining coverage definitions, and setting stricter requirements for underwriting.
Here's what business leaders need to know:
Unlike auto or homeowner's insurance, cyber liability policies are not built on a common template. Each insurer writes its own version, with varying definitions, exclusions, and coverage limits. This means:
Gone are the days of “three questions and done.” Carriers now require detailed technical disclosures to assess your cyber hygiene. At a minimum, insurers expect:
If you don't have these controls in place, coverage may be denied—or offered with higher premiums, lower limits, and restrictive terms.
Additional security investments can pay off for organizations aiming for more favorable coverage and pricing. Enhanced underwriting responses that demonstrate:
…can position your business for higher policy limits, lower retention amounts (i.e., deductibles), and shorter waiting periods for business income coverage.
With rising claim volumes, insurers are enforcing policy terms more strictly. Ambiguity in underwriting responses can lead to rescinded coverage and denied claims. Policies could be voided after a breach if it is revealed that a security measure wasn't properly implemented despite a "Yes" answer on the application.
Insurers have every right to deny a claim if they determine they wouldn't have written the policy had they known the whole story.
While policies differ, most modern cyber policies include the following categories of protection:
Insurers now price risk based on more than just industry and revenue. Factors include:
While $1 million in coverage is often a starting point, many businesses—especially those with higher revenue, compliance-driven, or healthcare exposure—are increasingly securing $5M–$10M policies. Expect starting premiums in the range of $3,000–$7,000 annually for base coverage, with the potential for a 40% credit or debit based on underwriting.
Managed IT providers are playing a growing role in helping clients navigate this landscape. In fact, many insurers now require clients to confirm that their IT provider was involved in completing the renewal application.
Your IT partner should be prepared to help:
Working with your IT partner not only ensures accuracy—it also helps you tell a more complete “cyber risk story” to underwriters.
While insurers, regulators, and businesses are all still figuring out how to respond to emerging threats—such as artificial intelligence misuse, evolving ransomware tactics, and changing state laws—the trajectory is clear: expectations are rising.
Cyber insurance is now a business essential. But securing and maintaining coverage requires proactive risk management, close coordination between IT and leadership, and a clear understanding of what's really in your policy.
At Systems Engineering, we actively work with clients to shape their technology and cybersecurity strategies, ensuring that cyber risk is addressed not just operationally but in ways that support insurability.
Our approach aligns cybersecurity programs to recognized frameworks such as the NIST Cybersecurity Framework, enabling organizations to demonstrate maturity, preparedness, and control when applying for or renewing cyber insurance policies.
The result is more than technical readiness—it's a clear, defensible cybersecurity strategy that meets evolving insurer expectations and supports business resilience.
Contact us today to start building a strategy that strengthens your security posture and positions you for successful cyber insurance renewal.
GUEST CONTRIBUTOR
Producer, Allen Insurance & Financial
James Sanborn is an accomplished insurance professional with 30+ years of experience. At Allen Insurance & Financial, he specializes in commercial insurance and risk management, focusing on complex coverage areas such as cyber liability, property and casualty, and industry-specific programs.