Cyber Insurance Underwriting: Cybersecurity Controls That Matter
To secure cyber insurance, businesses must demonstrate strong cybersecurity measures, as underwriters assess risk based on the controls in place. A “traffic light” system—Red (minimum), Amber (preferred), and Green (best-in-class)—helps guide organizations on what insurers expect for coverage eligibility and pricing.
Introduction: The Link Between Cybersecurity and Insurance Coverage
The rapidly evolving nature of cyber threats makes it challenging for insurers to create a consistent risk profile for cyber insurance. To remain competitive, insurers must not only identify and quantify cyber exposures but also balance those exposures with the needs of clients—and the security tools available in the marketplace.
For businesses seeking to mitigate their cyber risk through insurance, this means
presenting a strong cybersecurity posture to underwriters. The more robust and well-documented your security measures, the more attractive you are to insurers—and the better your chances of securing comprehensive coverage at competitive rates.
Understanding the Cybersecurity Controls “Traffic Light” System
Insurers often assess cybersecurity readiness using a three-tier system: Red, Amber, and Green. Each level reflects your organization's risk management maturity, with Green indicating a best-in-class security posture.
⚠️ Note: Each insurer has its own guidelines. This system is intended as a general framework to improve information security conversations with your broker or underwriter.
🔴 RED – Minimum Requirements (Non-Negotiable)
Failure to implement these controls will likely disqualify your business from obtaining cyber insurance coverage.
- Multifactor authentication (MFA) for employee email, remote access, and privileged accounts
- Offsite backups of critical data (preferably offline, encrypted, and tested annually)
- Endpoint Detection and Response (EDR) solution on all managed endpoints
- Audited patch management plan for software/hardware (especially critical vulnerabilities)
- Employee cybersecurity training, including phishing simulations
🟠 AMBER – Stronger Controls (Attractive to Most Insurers)
These practices go beyond the minimum. For high-revenue organizations, failing to meet these may be considered a red flag.
- Advanced email filtering with sandboxing and malicious attachment protection
- Privileged access management tools and practices
- Segregation and decommissioning plan for end-of-life or unsupported software/hardware
- Incident response and disaster recovery plan, tested annually
- Network segmentation based on data sensitivity and operational risk
- Local domain control disabled on all managed endpoints
🟢 GREEN – Best-in-Class Practices (Preferred by Insurers)
Meeting these standards may qualify your organization for enhanced coverage and lower premiums.
- Password management via vaults or randomizers with access control
- Detailed asset inventory of service accounts with monitoring protocols
- Security Information and Event Management (SIEM) implementation
- Data Loss Prevention (DLP) tools to stop breaches before they happen
- Adherence to an information security framework (e.g., NIST, ISO, CIS Controls)
- 24/7 Security Operations Center (SOC)—internal or outsourced
Why This Matters
Cyber insurance is no longer just a financial safety net—it’s a reflection of your organization’s security maturity. Implementing robust cybersecurity controls not only improves your risk profile but also ensures you’re adequately protected in a threat landscape that changes by the day.
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