Cyber insurance used to be about checking boxes. Buy an MFA license, deploy some antivirus, and you could expect coverage. But those days are gone. Insurers have watched claims skyrocket—driven by ransomware payouts in the billions—and learned the hard way that paper promises don’t stop breaches. Today, it’s not enough to say you have security controls; you need to prove they work.
That shift has turned cyber insurance into a litmus test for real resilience. Organizations that treat it as theater—claiming protections without evidence—risk higher premiums, denied claims, or no coverage at all. The ones that embrace it as a framework for proving effectiveness, on the other hand, build both stronger defenses and better insurance outcomes.
The technical and process controls underwriters expect
Understanding what insurers actually evaluate (and how they assess it) is crucial for building both effective security and drafting strong insurance applications. From a process perspective, insurers expect many of the same things your auditor would including:
- Documented information security policies including incident response, backup and recovery, and third party risk management practices
- Service-level agreements on reporting potentially impacted parties including users and customers
- Security awareness trainings and requirements for employees when it comes to handling secure data
Many of these expectations are aligned with common compliance frameworks like SOC 2, ISO 27001, and NIST. Also like SOC 2, cyber insurance is a common requirement in the enterprise sales process. These certifications serve as powerful trust signals for customers, partners, and stakeholders, serving as either competitive differentiators or table stakes depending on who you're selling to. That means embracing compliance can fill many of the process and policy requirements of a cyber insurance application.
Many of those compliance frameworks will also require technical controls in place—but the specificity to how they are deployed can be left to interpretation. The absence or misrepresentation of technical controls is one of the main reasons claims are rejected, so let’s review what typically comes up in compliance, underwriting, and due diligence processes:
1. Multi-Factor Authentication (MFA)
MFA has moved from "good to have" to "table stakes" for cyber insurance eligibility, and yet it’s where many organizations stumble. Insurers don't just want to know that you've purchased MFA licenses. They want proof of consistent enforcement across all available systems, remote access, administrative accounts, and privileged users.
The difference matters enormously. The City of Hamilton in Ontario learned this the hard way when its cyber insurance claim was denied after a breach—its MFA wasn't consistently enforced across all systems—including the origin of the breach. The insurer successfully argued that partial implementation meant the control wasn't truly effective.
What insurers typically want to see:
- Documentation showing MFA is required, not optional, for all relevant access points
- Evidence that enforcement policies are actually active
- Clear exceptions management for any accounts that can't use MFA
2. Endpoint security
Insurers don’t just check whether you have endpoint protection—they look for a bundled, layered approach that covers all the bases: EDR, AV, and host firewall. Each serves a distinct purpose, and gaps in any one of them can raise red flags about your overall security posture.
- Endpoint Detection and Response (EDR): Unlike traditional antivirus, EDR hunts for behaviors and techniques that attackers use in real time. Think unusual process injections, credential dumping, or encryption patterns tied to ransomware. This behavioral lens is what makes EDR a non-negotiable for underwriters: without it, an attacker with legitimate tools or novel malware can operate unnoticed.
- Antivirus (AV): AV may feel old-school, but it remains a baseline requirement. It weeds out commodity malware and known threats, helping reduce the noise EDR has to investigate. Insurers interpret missing AV as a sign of poor hygiene — and a reason to dispute claims tied to malware infections.
- Host Firewall: A host-based firewall enforces inbound and outbound traffic rules at the device level, whether on or off the corporate network. By limiting exposure and containing threats that bypass other defenses, it becomes a key control against lateral movement. Laptops without it are often the pivot point for ransomware to spread across an organization.
Bundled together, these controls demonstrate layered defense at the endpoint. Insurers see this as more than a checklist — it’s proof you can prevent, detect, and contain attacks before they spiral into the kind of claim that tests coverage limits.
3. Hardware inventory
A complete, accurate inventory is the backbone of any security program. If you don’t know a device exists, you can’t patch it, monitor it, or enforce controls on it. Those blind spots are exactly where attackers strike. In fact, unmanaged endpoints were implicated in over 90% of ransomware attacks. Without visibility, even the best EDR or vulnerability management platform can’t be applied consistently.
For underwriters, missing inventory is more than sloppy bookkeeping—it’s a clear risk signal. Like users missing MFA, unmanaged assets are often the root cause of breaches and a common reason claims get denied. On the flip side, being able to show a complete asset list with strong coverage percentages is tangible proof of diligence. It not only helps lower premiums but also demonstrates that you’re enforcing critical policies everywhere, which increases confidence that a claim will hold up when it matters.
4. Backups
Backups are critical for ransomware resilience, but many organizations don’t actively test their recovery capabilities. The key requirements focus on ensuring backups are tested, segmented, and protected against ransomware attacks. Insurers want to see that backup data is isolated from production systems and can't be compromised by the same attacks that might affect primary infrastructure.
Further, these backups need to be validated in that they can be restored in the event of an attack, and should be tested regularly to ensure as much. In addition to backup and recovery policies, teams need to be able to actively demonstrate those practices.
5. Security incident monitoring and response
A written incident response plan is table stakes — but insurers expect proof you can actually execute when it matters. But even the best response plan falls flat without visibility.
That’s where continuous monitoring, usually powered by a SIEM, comes in. Attackers rarely smash and grab; they linger, escalate privileges, and move laterally for weeks if no one is watching. A SIEM aggregates logs and correlates signals across endpoints and networks so you can catch suspicious behaviors such as repeated failed logins, strange data transfers, and malware propagation before they escalate into full-blown incidents.
The pairing of practiced response and continuous monitoring across systems is what separates theoretical preparedness from operational assurance
6. Vulnerability management
Attackers don’t need cutting-edge zero-days when unpatched servers or misconfigured endpoints are left wide open. Routine scanning surfaces exactly which systems are missing critical patches or drifting from secure baselines, closing off some of the most common entry points for ransomware and breaches.
At Prelude, we’ve discovered that 12–15% of devices have never been scanned at all. Those blind spots represent vulnerabilities invisible to IT, but viable for attackers. From an underwriting lens, that’s negligence. Consistent vulnerability scanning and patching where issues are prioritized, remediated, and tracked through resolution is what gives insurers confidence.
7. Network security
Basic network security (firewalls, network segmentation, secure remote access) remains fundamental. Insurers particularly focus on how you're protecting critical assets and whether you've implemented zero-trust principles.
The emphasis is on demonstrating that you've thought through network architecture from a security perspective and can show how different systems are protected and isolated from potential threats.
Why proof of effectiveness matters
The shift from claiming to proving control effectiveness reflects insurers' hard-learned lessons about the gap between security theater and actual protection. Too many claims have involved organizations that technically had required controls but weren't using them effectively.
Recent high-profile breaches underscore exactly why insurers have become so demanding about proof. AT&T and UnitedHealth Group both suffered massive data breaches not because of sophisticated attacks, but because multifactor authentication wasn't enabled on critical systems (🔒WSJ). UnitedHealth's breach alone is expected to cost over $2 billion, despite the company having MFA capabilities that simply weren't activated where needed.
Insurers have responded by requiring evidence that controls are not just present but actively working. This means:
- Audit logs that show controls in action: MFA login records, EDR detection events, backup completion reports—evidence that systems are functioning as intended.
- Testing data that proves effectiveness: Phishing simulation results, incident response exercise outcomes, backup recovery test reports—proof that controls work when needed.
- Monitoring outputs that demonstrate coverage: Asset inventories showing protection status, configuration reports proving policies are enforced, and gap analyses identifying areas needing attention.
- Documentation of continuous improvement: Evidence that you're not just maintaining controls but actively improving them based on testing and real-world experience.
This evidence-based approach serves both parties well. Insurers can better assess actual risk rather than theoretical protection. Organizations with strong controls can differentiate themselves and potentially secure better terms.
How Prelude helps demonstrate control coverage
The real challenge many organizations face is that generating this evidence manually is enormously time-consuming. Aggregating data from multiple security tools, running regular assessments, and maintaining documentation requires significant effort from already-stretched security teams.
This is where continuous monitoring and validation platforms become essential. Rather than scrambling to gather evidence when insurance renewal comes around, organizations need ongoing visibility into the efficacy and coverage of their controls.
What we’re building at Prelude addresses this challenge through several key capabilities:
- Automated coverage gap analysis: Prelude automatically detects where controls like MFA or EDR are missing across assets. When a device lacks required protections or falls out of policy, you have immediate visibility rather than discovering gaps during an insurance audit.
- Control validation: Regular, production-safe security tests simulate real-world scenarios to validate defenses. This provides the kind of evidence insurers increasingly want to see—proof that your defenses can handle actual threats when tested.
- Simplified evidence gathering: Aggregated dashboards and reporting provide stakeholder-friendly documentation. Rather than manually compiling evidence for insurers, you have ongoing records that create a clear trail of proof.
The platform essentially creates a continuous audit trail that aligns with what insurers want to see. Instead of point-in-time assessments, you maintain ongoing evidence of control effectiveness that can be readily shared during insurance applications and renewals. Perhaps most importantly, this approach helps organizations identify and address gaps before they become problems.
This kind of evidence-backed application streamlines the underwriting process and also positions your organization as a lower-risk prospect that insurers want to cover.
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