Cyber Insurance: A Strategic Layer in Cyber Resilience 

Cyber insurance is no longer a niche product—it’s a board-level conversation. As cyber threats grow in scale and sophistication, organizations are turning to insurance to mitigate financial risk. But insurance alone is not a defense strategy. At Truesec, we help organizations understand that cyber insurance is only effective when paired with strong cybersecurity fundamentals. 

This guide explores the role of cyber insurance in a modern security strategy, what it covers, what it doesn’t, and how to ensure your organization is not just insurable—but resilient. 

What Is Cyber Insurance? 

Cyber insurance is a financial product designed to offset the costs associated with cyber incidents. These may include ransomware attacks, data breaches, business interruption, and regulatory penalties. It is a risk transfer mechanism, not a risk elimination strategy. 

Why Cyber Insurance Is Gaining Traction 

  • Cybercrime is here to stay: Ransomware continue to plague organizations of all sizes. Cyberextortion will evolve with the threatlandscape, today Ransomware, tomorrow it might be something completely different.   
  • Regulatory pressure: GDPR, NIS2, and other frameworks impose heavy fines for data mishandling. 
  • Supply chain vulnerabilities: Third-party breaches can have first-party consequences. 
  • Board accountability: Cyber risk is now a fiduciary concern. 

What Cyber Insurance Typically Covers 

First-Party Coverage 

  • Incident Response Costs: Forensics, containment, and recovery. 
  • Legal and Regulatory Costs: Legal counsel and regulatory fines (where insurable). 
  • Notification and PR: Costs to notify affected parties and manage reputational damage. 
  • Business Interruption: Lost income due to downtime. 
  • Data Restoration: Recovery of corrupted or encrypted data. 

Third-Party Liability 

  • Lawsuits: Defense and settlement costs from affected customers or partners. 
  • Contractual Liabilities: Breach of service-level agreements. 
  • Privacy Violations: Claims related to mishandling of personal data. 

What It Doesn’t Cover 

  • Lack of basic security hygiene: If you failed to patch known vulnerabilities, expect a denial. 
  • Acts of war or nation-state attacks: Often excluded or heavily scrutinized. 
  • Reputation damage: Long-term brand erosion is not typically covered. 
  • Future lost business: Insurance won’t cover lost market share or customer trust. 

What Drives the Cost of Cyber Insurance? 

Cyber insurance premiums are not static—they’re calculated based on a complex risk profile. Understanding what influences your cost is essential for budgeting, negotiating coverage, and improving your insurability. 

Security Posture 

The single most influential factor. Insurers assess: 

  • Use of multi-factor authentication (MFA) 
  • Patch management practices 
  • Privileged access controls 

Organizations with mature controls often receive lower premiums and broader coverage. 

Industry Sector 

Some sectors are inherently riskier: 

  • Healthcare and financial services face strict regulatory scrutiny. 
  • Manufacturing and critical infrastructure are frequent ransomware targets. 
  • Retail and e-commerce handle large volumes of personal data. 

Company Size and Revenue 

Larger organizations typically pay more due to: 

  • Greater attack surface 
  • Higher potential losses 
  • More complex IT environments 

However, small and mid-sized businesses are not immune—many attackers now target them due to perceived weaker defenses. 

Claims History 

Just like car insurance, your track record matters. Previous incidents, especially if poorly handled, can increase premiums or lead to exclusions. 

Data Sensitivity and Volume 

Handling large volumes of personally identifiable information (PII), payment data, or intellectual property increases risk—and cost. 

Geographic Footprint 

Operating in multiple jurisdictions, especially those with strict data protection laws (e.g., EU, California), can increase both exposure and compliance complexity. 

Policy Limits and Coverage Scope 

Higher coverage limits and broader protections (e.g., covering regulatory fines, reputational damage, or supply chain incidents) naturally come with higher premiums. 

The Link Between Cyber Maturity and Insurability 

Insurers are tightening requirements. To qualify for coverage—or to avoid exclusions—you must demonstrate: 

  • Endpoint Detection and Response (EDR) 
  • Multi-Factor Authentication (MFA) 
  • Privileged Access Management (PAM) 
  • Regular vulnerability scanning and patching 

At Truesec, we’ve helped clients recover coverage tafter being denied due to insufficient controls. Cyber maturity is no longer optional—it’s a prerequisite. 

How to Prepare for a Cyber Insurance Policy 

  1. Conduct a Cyber Risk Assessment: Identify gaps in your current security posture. 
  2. Map Your Critical Assets: Know what data and systems are most valuable.
  3. Implement Baseline Controls: MFA, backups, EDR, and patching are non-negotiable.
  4. Document Your Security Program: Insurers want evidence, not promises.
  5. Engage Legal and Risk Teams: Ensure alignment between IT, legal, and executive leadership.  

Cyber Insurance and Incident Response 

Most policies include access to pre-approved incident response providers. However, these providers may not align with your business needs or local regulations. 

Truesec offers: 

  • Independent IR retainers: So you’re not locked into insurer-selected vendors. 
  • Rapid response teams: With deep expertise in ransomware, data breaches, and nation-state threats. 
  • Post-incident reviews: To strengthen your defenses and reduce future premiums. 

Key Stakeholders in the Cyber Insurance Ecosystem 

Understanding the roles of different actors in the cyber insurance landscape is crucial for navigating policies, claims, and risk management effectively. 

Policyholders (Businesses and Organizations) 

These are the insured entities seeking protection against cyber risks. They range from small businesses to multinational corporations and are, in this context, responsible for: 

  • Assessing their cyber risk exposure 
  • Choosing appropriate coverage 
  • Implementing cybersecurity best practices 

Insurance Brokers 

Brokers act as intermediaries between policyholders and insurance carriers. Their responsibilities include: 

  • Assessing client needs and risk profiles 
  • Recommending suitable policies 
  • Negotiating terms and pricing 
  • Assisting with claims and renewals 

Examples of Insurance Brokers: Howden, Söderberg & Partners, Marsh, Willis Towers Watson and Aon. 

Insurance Carriers (Underwriters) 

These are the companies that design, price, and issue cyber insurance policies. They: 

  • Evaluate risk and determine premiums 
  • Provide policy wording and coverage options 
  • Partner with cybersecurity firms for risk mitigation services 

Examples of Insurance Carriers: Beazley, Tryg, If, Gjensidige Forsikring, QBE and Zürich. 

Reinsurers 

Reinsurers provide insurance to insurance carriers, helping them manage large-scale losses. In cyber insurance, they: 

  • Spread risk across the global market 
  • Enable carriers to offer higher coverage limits 
  • Influence underwriting standards and pricing 

Examples of Reinsurers: Lloyd’s of London, Munich Re, Swiss Re and SCOR. 

Claim Handlers / Adjusters 

These professionals manage the claims process when a cyber incident occurs. Their role includes: 

  • Investigating the incident 
  • Coordinating with forensic experts and legal teams 
  • Determining coverage and payout amounts 

Examples of Claims Handlers / Adjusters: Crawford & Company, Sedgwick and McLarens. 

Incident Response Teams 

Often provided through the insurance policy, these teams include: 

  • Cybersecurity Forensics Experts: Identify the breach source and contain the threat 
  • Legal Counsel: Advise on regulatory obligations and liability 
  • Public Relations Specialists: Manage communication and reputation 

Examples of Incident Response Teams: Truesec, EY Cybersecurity and Mandiant. 

Regulators and Legal Authorities 

They enforce data protection laws and oversee compliance. Their involvement may include: 

  • Imposing fines or sanctions 
  • Requiring breach notifications 
  • Influencing policy design through regulation 

Examples of Regulators and Legal Authorities: IMY –  Sweden’s data protection authority, uropean Data Protection Board (EDPB) – Oversees GDPR enforcement across the EU and U.S. Federal Trade Commission (FTC) – Enforces data privacy and cybersecurity regulations in the U.S. 

Truesec’s Role in Cyber Insurance Readiness 

We help organizations: 

  • Achieve insurability: By aligning with insurer expectations. 
  • Reduce premiums: Through demonstrable cyber maturity. 
  • Build resilience: Through strategic advisory and technical hardening. 

Insurance Is Not a Substitute for Security 

Cyber insurance is a financial backstop, not a shield. It can help you recover—but it won’t prevent the breach. The real value lies in combining insurance with proactive defense, continuous monitoring, and expert response. 

At Truesec, we help you build a security strategy that makes insurance a last resort, not your first line of defense.