Facing the growing threat, companies and organizations have no choice but to invest in their cybersecurity. In addition to technological tools for cyber risk management, taking out cyber insurance has become essential.

The consequences of a cyberattack are numerous, and being covered against its damages helps to better withstand and limit negative effects (financial losses, legal and reputational risks, etc.).

How does it work? How to choose a cyber insurance policy? What does it cover?

What is cyber insurance?

What is the purpose of cyber risk insurance?

Cyber insurance is an insurance contract covering the financial and legal consequences of a cyberattack. It covers all or part of the costs generated by an attack and supports the company in resuming operations.

In other words, cyber insurance protects the business against the consequences of a digital incident (ransomware, data breaches, hacking, etc.) affecting its information systems, IT infrastructure, and digital governance. It can also cover the costs of restoring systems, legal assistance, or required notifications to customers.

Why has cyber insurance become indispensable?

Ransomware attacks, data leaks, and access compromises represent a real risk for all organizations. And the consequences of these attacks can sometimes be irreversible. According to Infolégale, 60% of companies that suffer a cyberattack shut down within 18 months.

Even for financially solid companies, a cyberattack can leave lasting damage. According to the 2024 Hiscox report, 47% of businesses experience a loss of prospects and 43% lose customers. Not to mention the costs (ransom, equipment restoration, etc.), which in 2024 exceeded €100 million in France.

In this context, cyber insurance becomes an essential safety net to cover the direct damages caused by an attack. It also includes coverage for harm caused to third parties (customers, suppliers, etc.).

What risks are covered by cyber insurance?

Cyber insurance provides coverage for losses related to the theft, destruction, deletion, or hacking of data. It also includes legal fees and ancillary costs generated by legal proceedings. Different types of compensation may be included in a cyber insurance policy:

• legal fees related to complaints or litigation,
• costs for restoring compromised personal identities of customers or employees,
• expenses incurred to recover or restore data encrypted by ransomware,
• investments needed to repair damaged IT systems,
• costs associated with mandatory notifications to customers, partners, suppliers, or employees after a data breach.

However, cyber insurance does not apply in the following contexts:

• cyberattacks or breaches that occurred before the activation of the cyber insurance policy,
• expenses needed to strengthen IT infrastructure after the attack,
• deliberate attacks by company employees or human error, as well as consequences on external services,
• damages related to a previously identified and uncorrected vulnerability,

How to assess your cyber insurance needs?

Who is cyber insurance for?

Cyber insurance is not only for large companies with extensive IT infrastructure. Any organization exposed to the digital world or working with digitalized clients or suppliers can fall victim to a cyberattack. However, some sectors are particularly targeted.

• Companies handling sensitive data: banks, insurance companies, hospitals, laboratories, and government entities. These actors process personal or strategic information. Cryptocurrency or online betting companies are also included.
• Technology companies: software publishers, SaaS providers, cloud service providers, ESNs. They often have critical access to client infrastructures or data and store vast amounts of data, often on their own systems.
• Any digitalized business: e-commerce, connected industries, service companies, regardless of their size or revenue.

Criteria for choosing the right cyber insurance

The first step is to assess the company’s cyber maturity and analyze its risk profile. A cyber performance audit allows identification of critical points and early consideration of necessary corrections or process improvements.

The cyber audit should also include supplier risk assessment (TPCRM). This proactive approach reduces blind spots in third-party procedures, especially in data handling. It involves listing all companies with any level of access to IT assets. A simple VPN access can be an entry point.

Choosing a cyber insurance policy also means preparing to provide the necessary documentation for risk assessment. Insurance companies may require audit reports and certification documents (internal policies, ISO 27001 certification, penetration test results, etc.).

Finally, depending on the insurance policy, cyber risk coverage may vary. Some policies only cover direct losses, while others include crisis management support. Assessing your cyber maturity beforehand helps identify exact insurance needs and select the provider best suited to your threats, risks, and budget.

How much does cyber insurance cost?

The price of cyber insurance depends on three main factors:

• the company’s revenue,
• the industry sector and level of exposure to cyber threats,
• the maturity of its cybersecurity posture.

The better a company identifies and corrects its weaknesses beforehand, the lower the cyber insurance premium will be. A prior audit helps evaluate both the company’s actual risk and its ability to demonstrate operational resilience.

Best practices to reduce risk and optimize coverage

Cyber insurance does not mean cybersecurity

Taking out cyber insurance does not directly protect against an attack. Cyber insurance covers damages but does not replace a cybersecurity strategy. Purchasing insurance remains optional, though strongly recommended. An organization that neglects its cyber defenses risks coverage exclusions. Insurers require known vulnerabilities to be corrected and minimal cybersecurity procedures to be defined and implemented.

Cyber insurance should be part of a broader cybersecurity and digital risk management strategy. Insurers’ experts carefully examine these measures. Demonstrating a strong cyber posture reassures insurers and allows for better coverage.

Key cybersecurity best practices to keep in mind

Taking a proactive cybersecurity approach reduces risk and limits the impact of an attack. All companies are affected, regardless of size. Implementing cyber defense measures can be decisive. The combination of human expertise, technology, and cyber insurance is key.

1. Continuously assess risk exposure: this necessarily involves conducting internal and supplier audits. Asset mapping, supplier inventories, and identification of security gaps or internal process flaws should lead to a clearer understanding of exposure and weak points.
2. Deploy monitoring and assessment tools: CISOs must equip themselves with technological solutions to drive this transformation effectively. Continuous IT asset monitoring can be automated, with alerts for failures. Similarly, supplier assessments help identify risks and assign a rating to gauge third-party cyber maturity.
3. Implement an action and remediation plan: first, define clear procedures to correct anomalies and secure high-risk technological environments. The primary goal is to limit the impact on business operations and customers. Beyond these corrective actions, it is above all a proactive approach of continuous monitoring and control. Obtaining certifications such as ISO 27001 and mastering regulations like DORA, NIS2, or HDS becomes essential to anticipate risks and limit cyberattacks.
4. Internal training and employee awareness

In 2024, 95% of corporate data breaches were caused by human error. Employees are often the primary risk of cyberattacks (phishing, CEO fraud, negligence, etc.). Raising awareness of best practices must become part of company culture. Strong passwords, verifying email senders, and checking attachments are all preventive actions that reduce cyberattack attempts. Employee vigilance and detection of “risk signals” should be part of daily routines and complement technological cybersecurity solutions.

Board of Cyber solutions to reduce your cyber risk

Public and private organizations are launching cybersecurity strategies that include choosing cyber insurance. More advanced ones strengthen their existing systems and seek greater efficiency. IT teams and CISOs are involved at every stage of the production chain. Relying on technological solutions for evaluating, rating, and monitoring cyber defenses is becoming indispensable.

Board of Cyber offers solutions to measure and improve a company’s cyber performance. Through automation, Security Rating and Trust HQ simplify the assessment of cyber maturity. They also provide analysis dashboards and third-party management tools to identify high-risk suppliers. These technological tools support audit and self-assessment efforts in a continuous improvement process of cyber health. They help CISOs identify vulnerabilities and prioritize remediation actions to select the best cyber insurance coverage.