Cyber insurance used to be something I handled with just a few forms and policies. Now it has become a pretty involved exercise, especially for anyone in IT. Insurers are looking much closer at the details, and my technical decisions have a direct impact on what coverage the business can get.

Cyber incidents are on the rise, and insurance companies are asking a lot more of organizations like the ones I work with. I see insurers checking everything from daily security practices to advanced cyber risk assessment processes. If you're in charge of IT, you're no longer just a background player. You're on the front lines, shaping the organization's insurability and how well you can bounce back after an incident.

I wrote this guide to help other IT managers, CIOs, and decision-makers in APAC understand what to expect, what areas really matter for insurers, and how to get your organization ready for today's cyber liability coverage requirements.

Why Cyber Insurance Is No Longer as Simple as Buying a Policy

Just a few years ago, buying cyber insurance was mainly about filling out applications and ticking boxes. Most organizations could get some level of cyber liability coverage with a basic security policy, antivirus software, and a firewall. That has changed a lot.

Now, cyber insurance requirements have gone up because insurers are dealing with record numbers of ransomware claims and large payouts. I see more insurance IT compliance checks, and the risk is now being shifted back onto organizations. In many ways, insurance providers expect you to actively reduce risk as a condition for getting protection.

With this shift, IT and security teams play a much bigger role in the insurance process. My conversations with brokers and underwriters now focus on the specific technical controls we have in place. Documentation matters, but so does actual enforcement. There are usually a lot of questions, and not having the right answer can mean sky-high premiums or getting dropped by the insurer.

So, IT leadership can't treat cyber insurance as just a legal checkbox. It's now a measure of how well your security matches what's happening in the real world, and how much you can step up to meet the real threats out there.

Recent Changes in Cyber Insurance: Why IT Teams Feel the Difference

I saw cyber insurance shift from broad, almost automatic policies to much stricter underwriting in response to increasing cyber threats. The ransomware wave, which hit both large companies and SMEs, pushed insurers to clamp down. I've had insurers ask for detailed breakdowns of our MFA (Multi-Factor Authentication) rollout or request logs showing backup recovery tests. It's no longer about having a plan on paper but being able to prove, with evidence, that it's working every day.

Here's what I've learned the hard way: underwriters don't care what your policy document says if the technical evidence tells a different story.

Insurers now look carefully at:

• Frequency and success of patching and vulnerability management routines
• Separation of admin and user credentials
• How security awareness training is actually conducted, not just scheduled
• History of past incidents and details of incident response planning

If a business has filed ransomware insurance claims recently or has had to deal with data breaches, the scrutiny gets even tougher. Underwriters want to see that lessons have been learned and concrete changes have been made. Adaptability and ongoing improvement really matter for future insurability.

For IT teams here in APAC, this means keeping an eye out for new risks and regularly updating defense plans. Long gone are the days when a single annual review could check all the boxes.

What Insurers Really Look at When Reviewing Cyber Insurance Applications 

During a recent application, I noticed how insurers rely heavily on detailed questionnaires covering everything from endpoint security to log retention policies. Some even run external vulnerability scans on your public-facing infrastructure before processing the application. Providers often use outside risk scoring services to rank organizations against others in their sector. If those third-party risk scores don't match your self-assessment, insurers usually go with the least favorable view.

One point I always emphasize to others is the difference between documentation and actual controls. Executives sometimes believe an official IT policy is enough. In practice, insurers will reject, reduce, or even cancel policies when controls don't match what's been stated.

For example, if the application claims 100% MFA coverage but the network scan shows open RDP endpoints without extra authentication, that's a major red flag for the underwriter. The best way to get ahead is to double-check that what's written in policies reflects what's actually in place.

That brings us to the specific technical controls insurers care about most. These aren't abstract requirements. They're the concrete things that will come up in every application and renewal conversation.

Cyber Insurance Requirements IT Teams Actually Have to Meet

Identity and Access Management (IAM) Controls

One of the first topics insurers ask about is identity management. They expect to see MFA enforced everywhere it matters. This includes all users accessing corporate email, remote VPN connections, and especially for admin accounts in cloud platforms. I've seen coverage denied for companies still letting users authenticate to cloud apps with only passwords.

There's also a lot of focus on least privilege, which means making sure users get access to only what they absolutely need. Admin account sprawl is another weak spot. Insurers often require a clean separation between regular user accounts and those with admin privileges. Documenting both technical controls and the process for regular review helps a lot during renewal time.

Common mistakes include failing to roll out MFA to service accounts or legacy systems and not properly managing old employee credentials after offboarding. These gaps are among the top reasons for denied or limited coverage, in my experience.

Endpoint and Device Security

Insurers now draw a line between traditional antivirus and the more advanced Endpoint Detection and Response (EDR) tools. I've found that many policies ask specifically about EDR coverage for all laptops, desktops, and servers. Systems without regular security updates or unsupported operating systems get extra scrutiny.

Remote work complicates this even more. Unmanaged devices accessing corporate data, even if only rarely, are seen as weak spots. The lesson here is simple: document how you manage and monitor both company-owned and BYOD endpoints so you can demonstrate consistent enforcement.

Network Security and Segmentation

Modern firewalls do more than just block outside traffic; they now provide deep packet inspection and detailed monitoring. Insurers want to know if there's logging and monitoring in place, not just rules configured. Internal segmentation, meaning breaking up your internal network so a single breach can't spread everywhere at once, is also a frequent topic.

With hybrid work and increased use of cloud applications, insurers expect clear policies for traffic between on-premises systems, remote connections, and cloud-hosted platforms. Explaining how you map and control these flows is something I always prepare for before dealing with brokers and insurers. Taking the time to show real examples of network controls helps prove your security maturity.

Backup, Recovery, and Ransomware Readiness

After so many ransomware claims, insurers now demand much more from backup strategies. I've seen explicit requirements for keeping backups offline and immutable, meaning they can't be encrypted or deleted if an attacker gets admin rights.

Recovery testing is also really important. Insurers want evidence, usually logs or reports, that recovery works, including the time it takes to restore key systems. If you're hit by ransomware and can't restore quickly, claim payouts might be reduced or delayed while the insurer investigates. I always recommend at least quarterly recovery tests, with outputs saved for audit or underwriting purposes.

Logging, Monitoring, and Detection

Basic logging used to be enough, but now insurers ask about SIEM (Security Information and Event Management) solutions, log retention periods, and the actual monitoring process. You may need to show retention policies (often 90 days or more), as well as alerting workflows and escalation paths.

Insurers want to confirm that the organization can detect and respond to incidents quickly, so documenting actual use of monitoring tools is key. Some companies in APAC have started using managed SOC (Security Operations Center) services to step up their response as coverage requirements grow, and that helps when showing proof to insurers.

Incident Response and Breach Preparedness

One consistent trend is insurers requiring formal incident response plans. That means written plans, tested through at least annual tabletop exercises. I advise creating clear internal escalation processes, so everyone knows who contacts insurers, lawyers, and third-party responders.

Some underwriters require access to external forensic partners and breach coaches as a condition of coverage. Showing that your plan covers notification procedures, and that it has been tested with scenarios based on real-world threats, really helps the application. If your incident response isn't up to date, it's time to update and test before renewal.

Security Awareness Training

I've seen many organizations treat security training as just a box to check. Insurers see things differently. They want real proof that users are trained regularly and that phishing simulations are run, tracked, and documented. If 80% of the company fails their simulation, expect questions from the underwriter.

It's also not enough to train once a year and forget; insurers want ongoing, measurable training, with results provided at renewal. Consider running quarterly training sessions with varied phishing templates to keep users alert and build stronger security habits.

Third-Party and Supply Chain Security

The rise in incidents from supplier breaches means insurers are checking controls far beyond your walls. That includes minimum requirements for vendors who access your systems or data, explicit review of SaaS application providers, and explanation of how shared-responsibility security gaps are managed.

I always recommend creating a vendor risk register and maintaining evidence that important partners meet your security standards, even if they're much larger or better known than you. Sometimes this means asking your legal team for help to ensure vendor agreements actually include enforceable security obligations and documenting the process so it's easy to present to insurers.

Why Cyber Insurance Claims Get Denied and How to Avoid the Common Traps

With all those technical requirements covered, it's worth stepping back to look at where things actually go wrong. I've seen claims denied or disputed for reasons that sound minor but end up being really expensive.

The most common reasons are:

• Misrepresenting the level of control in policy applications (for example, saying you have MFA everywhere when you don't)
• Controls documented but not consistently applied in reality (like backup testing written in policy but never performed)
• Failing to maintain required security levels after receiving coverage (such as letting systems go unpatched to save time)
• Policy gaps: IT practices on the ground don't match management's stated policy, especially during growth or rapid organizational change

One story that stands out: I worked with a team who filled out an application in a hurry, copying old answers because they ran out of time before renewal. When we had an incident, the insurer noticed there hadn't been an MFA upgrade as stated, and we landed in a long legal review. That's a stressful and expensive situation nobody wants.

To avoid this, treat every application as a chance to double-check controls, not just repeat what you did last year.

Prepping IT for Insurance: Steps I Follow Before Applying or Renewing 

My best results came from preparing well in advance of renewal or a new application round. Here are the key actions I've learned work best:

• Run an internal gap assessment against a typical insurer questionnaire. I use real-world checklists, not just my own spreadsheets.
• Verify that all documentation matches what's enforced technically. If the policy says all remote users have MFA, I double-check logs and spot-audit accounts.
• Prioritize fixes that matter to insurers, for example, closing unsupported RDP services, pushing MFA to 100%, and hardening critical admin systems, before focusing on low-impact improvements.
• Communicate with brokers and underwriters early. Bringing evidence to the table makes your risk easier to evaluate and often leads to better rates.

It also helps to keep a running record of IT improvement projects and changes made after each cyber incident or near miss. This documentation can serve as proof that your team is serious about staying sharp and constantly raising the bar on security, reassuring underwriters who are on the fence about providing coverage.

IT Audits, External Assessments, and Working with Insurers

Internal teams get used to their own processes and, over time, can overlook gaps. I have seen value in bringing in independent security assessors to review critical areas before renewal. These experts can spot issues that aren't obvious to in-house teams but jump out for an insurer. They're also good at translating technical controls into insurer language, so things like "endpoint telemetry" or "zero trust access" are described in ways that are clearly actionable.

It's important to remember that insurance isn't a one-time compliance task. Requirements and expectations change every year. Keeping up means treating IT controls as ongoing hygiene, not just something that gets dusted off once before an audit.

Continuous compliance and improvement are what insurers reward, both in coverage availability and in lower premiums. For many IT teams in APAC, this approach means dedicating time each quarter to review new threats and best practices, so you don't fall behind. Building security review and audit into regular IT operations pays off both in insurance and real-world resilience.

Frequently Asked Questions

Why do cyber insurance claims get denied?

In most cases I've seen, claims are denied because the security controls listed in the application were not consistently enforced in practice. Insurers typically investigate what was actually in place at the time of the incident, not what was written in a policy document months earlier. Gaps like incomplete MFA coverage, untested backups, or outdated systems are common reasons disputes arise.

Does having cyber insurance mean I'm fully protected from ransomware?

No. Cyber insurance is not a substitute for strong security controls. Insurers expect organizations to actively reduce risk, and coverage often depends on meeting ongoing security requirements. If ransomware hits and critical controls are missing or poorly maintained, insurers may limit payouts or delay claims while they investigate what failed.

Do insurers verify security controls before paying a claim?

Yes, and the scrutiny has increased significantly. Insurers often review logs, configuration evidence, backup reports, and incident timelines after a claim is filed. If the technical evidence contradicts what was stated during application or renewal process, coverage can be challenged or reduced.

Is multi-factor authentication mandatory for cyber insurance coverage?

In practice, MFA is one of the most heavily weighted controls in modern cyber insurance assessments. Most insurers expect MFA on email, remote access, cloud platforms, and all privileged accounts. Partial deployment or exceptions for legacy systems are frequently flagged during underwriting and can affect both premiums and coverage decisions.

How often should backups be tested for cyber insurance purposes?

Insurers increasingly expect regular recovery testing, not just backup creation. Quarterly restore tests are a common benchmark, especially for systems critical to business operations. What matters most is being able to show evidence that backups work and that recovery timeframes are understood and documented.

Can incorrect answers on a cyber insurance application cause problems later?

Absolutely. Inaccurate or outdated responses are one of the fastest ways to run into trouble during a claim. Copying answers from previous years without verifying current controls is a common mistake. Insurers may treat this as misrepresentation, which can lead to reduced payouts or outright coverage disputes.

Making the Most of Cyber Insurance as a Security Benchmark

I treat cyber insurance requirements as a good motivator for broader security improvements. Insurance should double-check what I'm already doing to reduce risk, rather than being my only backup plan. Preparing for coverage forces organizations to document their real-world security practices, strengthen incident response, and close the gap between policy and daily behavior.

For IT managers and decision leaders, treating the insurance process as a practical benchmark leads to stronger resilience, smoother renewal cycles, and less stress when incidents do happen. Over time, these habits build a security culture that goes beyond compliance and really benefits IT operations. Meeting cyber insurance requirements sharpens my focus and reshapes my priorities, not just for insurance, but for all ongoing security efforts.

Wrapping up, getting cyber insurance today is about much more than filling out forms; it's about proving your security every day, keeping evidence ready for review, and constantly leveling up your defense. IT professionals in APAC and everywhere else should see the insurance process as a strong framework to step up overall security. Stay sharp, document honestly, and treat every renewal as a chance to take IT protection up a notch. That way, you don't just unlock coverage. You build stronger security at every step.

If you’re reviewing your security posture ahead of a cyber insurance renewal, an independent assessment can help surface gaps between written policy and real-world controls. FunctionEight supports organizations across APAC with practical IT security audits and risk-focused assessments designed to reflect how environments are actually built and managed.

Learn more about our IT security audit services here:
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This article is for general information only and does not constitute legal or insurance advice. Always consult your broker or insurer for specific requirements.

Further reading (optional): For current data on ransomware, cyber claims and insurer expectations, see Allianz Commercial’s “Cyber security resilience 2025 – Claims and risk management trends” report: https://commercial.allianz.com/content/dam/onemarketing/commercial/commercial/reports/cyber-security-trends-2025.pdf