Cyber insurance has shifted from a nice-to-have to a business necessity, especially for companies handling sensitive data. But getting a policy in 2026 isn’t as simple as filling out an application. Insurers now require specific IT security measures before they’ll issue coverage, and they verify these requirements during the claims process.
What Insurers Require in 2026
Every major cyber insurance provider now has a baseline set of IT requirements. Miss any of these and your application will be denied or your premiums will be significantly higher:
- Multi-factor authentication (MFA) on all email accounts, VPN access, and administrative portals. This is non-negotiable with every insurer we work with.
- Endpoint Detection and Response (EDR) on all workstations and servers. Traditional antivirus is no longer sufficient.
- Regular data backups with at least one copy stored offline or in immutable cloud storage that ransomware can’t encrypt.
- Patch management with critical security updates applied within 30 days of release.
- Employee security awareness training conducted at least annually, with phishing simulations.
- Privileged access management restricting admin accounts to IT staff only, with separate accounts for daily use.
The Claims Trap Most Businesses Don’t Know About
Here’s what catches businesses off guard: when you file a claim, the insurer investigates whether you were actually maintaining the security measures you claimed on your application. If you said you had MFA enabled but an investigation reveals it wasn’t active on the compromised account, your claim can be denied.
We’ve seen this happen to a Central Florida business that checked “yes” for MFA on their application because it was enabled on their email. But the breach came through a VPN connection that didn’t have MFA. The insurer denied the $120,000 claim. The security requirements on your application need to be implemented everywhere, not just in one place.
How to Get Better Rates
Businesses with strong security posture pay significantly less for cyber insurance. The most effective ways to reduce your premiums:
Work with a managed IT provider who can document your security controls. Insurers want evidence, not just checkboxes. Provide your insurer with reports showing your patch compliance rates, backup test results, phishing simulation scores, and EDR deployment coverage.
Get a third-party security assessment or penetration test. Some insurers offer 10-25% premium discounts for businesses that can demonstrate their security controls have been independently verified.
What Cyber Insurance Covers
A comprehensive cyber insurance policy covers incident response costs (forensics, legal counsel), business interruption losses during downtime, customer notification and credit monitoring expenses, regulatory fines and penalties, and sometimes ransom payments. Read the fine print on ransomware coverage though. Some policies cap it well below the overall policy limit, and some are excluding it entirely.
For most small businesses in Central Florida, a $1-2 million policy costs $2,000-$7,000 per year depending on your industry and security posture. That’s a fraction of the $120,000+ average breach cost, making it one of the more straightforward ROI calculations in business.
Frequently Asked Questions
What IT requirements do I need for cyber insurance?
Most cyber insurance providers now require multi-factor authentication, endpoint detection and response (EDR), regular data backups, a patch management program, employee security training, and an incident response plan. Some also require privileged access management and email filtering.
How much does cyber insurance cost for a small business?
Cyber insurance premiums for small businesses typically range from $1,000 to $7,500 per year, depending on your industry, revenue, data volume, and security posture. Businesses that meet all IT requirements often receive 10-25% premium discounts.
Does cyber insurance cover ransomware payments?
Many policies cover ransomware-related costs including ransom payments, business interruption, data recovery, legal fees, and customer notification. However, coverage varies by policy and some insurers are excluding ransomware payments. Review your policy carefully and work with your broker to understand your specific coverage.
