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Cybersecurity Insurance – What You Need to Know to Stay Covered
Christopher Souza | CEO
When it comes to cybersecurity, proactive steps are key to mitigating damage. Cybersecurity insurance has become a vital component of business resilience strategies in today’s world. Cybercriminals are constantly developing more sophisticated ways to attack your data, with AI-driven phishing and supply chain breaches becoming increasingly prevalent. As a result, businesses worldwide are facing unprecedented risks that demand a multi-layered defense. Insurers are responding by raising the bar, tightening policy conditions, and demanding proof that businesses are actively mitigating cyber risks. The goal of this article is to outline key trends and updated requirements for cybersecurity insurance in 2025 so that your policy remains effective—and pays out when your business needs it most.
1. Basic Tools Are No Longer Optional – They’re Mandatory
As mentioned in our article last year, businesses must have fundamental cybersecurity measures in place before they even consider cyber insurance. These include essential tools like firewalls, antivirus software, intrusion detection and prevention systems (IDPS), SIEM systems, multi-factor authentication (MFA), and more. This isn’t just because cyber insurance doesn’t prevent cyberattacks—it’s because without proper security infrastructure, insurance providers won’t even consider issuing a policy. After all, insurers don’t like taking unnecessary risks any more than you do.
Five years ago, businesses could purchase cyber insurance with minimal security restrictions—but those days are long gone. Now, insurers demand advanced measures to combat today’s evolving threats, including:
- Zero-Trust Framework: A security model that assumes no one inside or outside your network is inherently trustworthy. Continuous verification ensures that only authorized users can gain access.
- Cloud Security Compliance: Since 2020, remote work and cloud-based operations have dominated modern business environments. As a result, insurers now require companies to follow strict cloud security best practices to qualify for lower premiums.
- AI-Driven Tools: As AI becomes more prevalent in both cyberattacks and cybersecurity, insurers are pushing businesses to adopt AI-powered risk analysis tools that detect and prevent attacks before they happen.
Failure to adapt to these new controls doesn’t just expose your business to cyber risks but could mean higher insurance premiums, denied coverage, or even rejected claims altogether.
2. Required Security Assessments
While cyber insurers have always required businesses to conduct regular security assessments, in 2025, they no longer take your word for it. Instead, they prefer routine third-party security assessments to validate that a business is actively managing risks and that its cybersecurity measures are fully up to date. These tests go beyond simple vulnerability scans and may include things like Continuous Security Monitoring, Penetration Testing, and Cyber Risk Score reports.
Make sure your business is prepared to work with these assessments. Ignoring can be a costly mistake that could lead to policy cancellations or reduced payouts if a breach happened to occur.
3. Incident Response Plans Must Be PRO-Active, Not RE-Active
Unfortunately, cyberattacks aren’t a matter of if—but when. Cyber insurers now expect businesses to have a fully documented and regularly tested incident response plan (IRP). These response plans must include clear communication protocols so that customers and stakeholders receive timely updates in the event of a breach. Additionally, insurers are prioritizing plans that incorporate AI-powered tools for rapid breach detection and data recovery protocols due to their proven success in reducing reputational harm. Endpoint Detection and Response (EDR) with AI Integration is one of these tools that provides continuous monitoring and automated responses to threats all the way at the endpoint level. AI-Driven Identity and Access Management (IAM): is another crucial solution for safeguarding sensitive information that insurers are putting more value on.
4. Employees Are Your Biggest Risk
Even with advancements in AI and security automation, human error remains the most significant vulnerability in 2025. Even the best cybersecurity tools can’t prevent an untrained employee from clicking a malicious link or falling for a scam. That’s why insurers now link policy approval and pricing to the effectiveness of a company’s employee cybersecurity awareness training program. Without a structured and ongoing security education program, employees won’t be equipped with the knowledge to recognize and effectively respond to threats. This puts the entire business at risk and makes insurers hesitant to work with you.
5. Learning From Others’ Mistakes
Cyber insurance is supposed to act as a financial safety net, but what happens when that net is riddled with holes? In 2021, Sinclair Broadcast Group fell victim to a ransomware attack that cost the company a staggering $70 million. Fortunately, Sinclair had a cyber insurance policy with $50 million in coverage. However, two excess insurers refused to pay claims—leaving Sinclair to fight a costly legal battle to recover $20 million in unpaid claims over a disagreement in the value of lost business assets.
The Sinclair case is a wake-up call for businesses who solely rely on cyber insurance as a financial fallback. While cyber insurance is important and can mitigate damages done by a cyber attack to your company, you need to work with them and be proactive. Insurance providers no longer write blank checks for cyber incidents and they expect businesses to prove they did everything in their power to prevent an attack in the first place.
Be smart. Don’t wind up like Sinclair who paid millions out of pocket for an attack they thought was covered. Scrutinize policy terms, stay compliant and document everything, and work with experts like TSI to help your organization prepare. Cyber insurance is a partnership, not a guarantee.
Conclusion
By investing in cutting-edge cybersecurity tools, running frequent security assessments, and training employees to recognize threats, businesses can:
- Lower Premiums
- Maximize Coverage
- Ensure Faster Payouts After an Attack
Cyber threats are becoming smarter and more aggressive, and the steps you take to secure your business should reflect these evolving challenges. Prove to insurers that you are actively managing cybersecurity risks—don’t let their policies become a false sense of security. Instead, ensure that your cyber insurance policy is a real asset in your cyber defense strategy.
TSI has helped organizations improve their cybersecurity postures to make the most out of their cyber insurance policies. We can help. Our leading team of experts takes pride in giving your company the best practices for mitigating cyber attacks and saving you money. If you’re interested, please contact us today. For more information on TSI’s full suite of cybersecurity services and solutions, visit our page HERE.
About Technical Support International
TSI is 35-year old cybersecurity (MSSP) and IT support (MSP) company specializing in helping DIB organizations address their NIST 800-171 and CMMC compliance obligations. As a CMMC-AB Registered Provider Organization (RPO), TSI offers a complete NIST 800-171 and CMMC support solution to help guide our clients toward a successful certification audit and provide the assurance that they’re adhering to these expansive compliance requirements.
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