Cyber insurance isn’t what it used to be. A decade ago, getting coverage was as easy as filling out a short form. Today? Not so much. Insurers demand proof of strong security measures before even considering a policy.

If you think cyber insurance is just a box to check, think again. It’s no longer just about having a policy—it’s about proving you were proactive before an attack happens. If you fail to do that, your claim might be denied when you need it the most.

Why Cyber Insurance Is Harder to Get (And Why That’s a Good Thing)

PROVE YOUR COMPANY IS TAKING IT SERIOUSLY

Remember when you could get homeowners insurance without proof of a security system? Those days are long gone, and cyber insurance has followed suit.

With ransomware, data breaches, and operational disruptions at an all-time high, insurers have adjusted their approach. Instead of reacting to attacks, they’re forcing companies to prove they take security seriously—before offering coverage.

What this means:

• Employee training is no longer optional—it’s expected.
• Robust security protocols must be documented and enforced.
• Incident response plans should be tested and refined regularly.
• Multi-factor authentication (MFA) is non-negotiable.

Insurers want to know: If something goes wrong, can you demonstrate that you took every reasonable precaution? If not, expect higher premiums—or worse, no coverage 

Getting the Right Coverage: What CFOs Often Get Wrong

Many organizations are underinsured—not because they lack policies but because they base coverage on outdated risk assessments.

According to Craig Szukowski from the Tech Collective, most businesses only realize they’re underinsured after an attack happens. CFOs often select coverage based on compliance requirements rather than actual risk exposure. The result? Companies face costs 2x to 3x higher than expected when disaster strikes.

A better approach? Financial risk quantification. Before negotiating your policy, you need a clear picture of:

• How much downtime can your business afford?
• The financial impact of a 30-day outage (which is increasingly common).
• The potential cost of a ransomware demand—and whether your insurer will even cover it.

The 2025 Cyber Insurance Checklist: What You Need to Qualify

If you want to position yourself for favorable rates—and reliable coverage—insurers are looking for a few key things:

1. Multi-Factor Authentication (MFA)
   • If you don’t have it, expect rejection or sky-high premiums.
2. Employee Engagement & Training
   • Insurance companies want evidence that your employees know how to spot phishing attacks and social engineering attempts.
3. Incident Response Plan
   • How quickly can you detect and contain a breach? If your company takes months to identify an attack, that’s a red flag for insurers.
4. Vendor & Third-Party Risk Management
   • Schools, hospitals, and businesses have learned this the hard way: A breach in your supply chain is your breach. Insurers expect organizations to vet their third-party vendors thoroughly.
5. Transparency in Your Application
   • Lying or exaggerating security measures can backfire. If forensic investigators find that your security controls weren’t implemented (not just listed on a form), expect claim denial.

Lessons from Recent Breaches

The recent PowerSchool breach—which compromised 60 million student records— is a powerful wake-up call: even institutions with insurance may not be adequately covered. Many education sector policies were outdated and failed to cover third-party breaches.

Similarly, a large construction firm in Atlanta was completely shut down for six months due to a ransomware attack. While their cyber policy covered some initial losses, their downtime costs quickly exceeded coverage limits—a devastating financial blow.

These cases underline the same point: You needn’t just cyber insurance. You need the right cyber insurance.

Final Thought: Insurance Isn’t a Substitute for Security

Cyber insurance is not a safety net—it’s a last resort. Your best defense is a strong cybersecurity program that minimizes your risk in the first place.

If you’re preparing for cyber insurance negotiations in 2025, evaluate your security posture now. Conduct a risk assessment, ensure compliance with evolving insurer requirements, and, most importantly—keep your employees engaged in cybersecurity best practices.

At Aware Force, we help organizations strengthen their cybersecurity posture through engaging content, employee training, and risk assessments—making cyber insurance negotiations smoother. Want to learn more? [Contact us here] to see how we can support your team.