While cybercriminals innovate at lightning speed, cybersecurity teams—led by Chief Information Security Officers (CISOs)—often find themselves relying on outdated playbooks. Cyber insurance, once viewed as the ultimate safety net, is no exception. Findings from our recent survey conducted by Wakefield Research illuminate glaring challenges in how these leaders understand and leverage their cyber insurance policies.
Cyber Insurance: A Constant Balancing Act
According to the survey, two-thirds of CISOs (68%) frequently or constantly evaluate new security solutions to reduce their cyber insurance premiums. This statistic reflects not just a diligent effort to manage costs but also a recognition of the precarious financial balancing act many CISOs face. It’s no secret that cybersecurity budgets are perpetually under scrutiny, and insurance premiums represent a significant slice of that pie.
The pressure to lower premiums has driven many CISOs toward technologies like Zero Trust Network Access (ZTNA), endpoint security, and network access control (NAC) that demonstrate proactive risk reduction. Insurers, of course, favor organizations that show measurable efforts to mitigate risks. But this dance of cost control often leaves little room for the real issue: understanding what the policy actually covers.
A Knowledge Gap with Consequences
The survey reveals a disconcerting trend: more than half of CISOs lack clarity on whether their policies cover specific threats or costs. Among the most alarming findings:
- Uncertainty about specific threats:
- 58% of CISOs don’t know if their policy covers supply chain attacks.
- 57% are unsure about insider threats.
- 55% are unclear about phishing attack coverage.
- 51% don’t know if ransomware payments are included.
- Uncertainty about specific costs:
- Only 44% are confident their policy covers incident response costs.
- 41% know whether data restoration is included.
- Coverage for intellectual property theft remains murky for 48% of respondents.
This lack of clarity is even more pronounced in smaller organizations with revenues between $500M and $1B, where uncertainty about phishing attack coverage spikes to 65%, and confusion about intellectual property theft climbs to 57%.
Why This Matters Now
Cyber insurance is no longer a nice-to-have—it’s a must-have. With regulations tightening, ransomware attacks becoming more sophisticated, and supply chain vulnerabilities multiplying, insurance offers CISOs a measure of financial assurance. But an ill-informed CISO is akin to a soldier wielding a shield with unknown weaknesses. Without a clear understanding of what their policies cover, CISOs risk unpleasant surprises during an incident when time, money, and reputations are on the line.
Additionally, the fallout from misunderstanding coverage extends beyond the CISO’s office. Boards, investors, and even customers increasingly view cyber resilience as a competitive differentiator. A failure to grasp policy specifics could lead to reputational damage that no payout can fully mitigate.
Bridging the Gap: From Uncertainty to Confidence
The good news? There are actionable steps CISOs can take to close the knowledge gap and make cyber insurance work harder for them:
- Conduct a Coverage Audit:
A detailed review of the insurance policy should be a priority, with a focus on understanding coverage for the most critical threats and costs. Partnering with legal counsel or third-party insurance experts can help translate dense policy language into actionable insights.
- Engage with Insurers:
Regular, proactive communication with insurers is essential. CISOs should ask direct questions about specific scenarios, such as ransomware attacks or intellectual property theft, and document these discussions to avoid ambiguity.
- Leverage Technology for Premium Reductions:
Implementing and documenting robust security controls not only reduces risks but also strengthens the case for premium discounts. Insurers are more likely to offer favorable rates to organizations with a demonstrated commitment to cybersecurity best practices.
- Educate the Entire Organization:
The CISO’s office cannot shoulder this burden alone. Building awareness across the executive team and board about policy nuances ensures alignment on expectations and preparedness.
- Focus on Emerging Threats:
With supply chain attacks, insider threats, and phishing among the top areas of uncertainty, investing in solutions like advanced threat detection, insider threat management, and secure access controls can address both insurance and operational concerns.
A Call to Action for the Industry
The findings from this survey are a wake-up call—not just for CISOs but for the broader cybersecurity community, including insurers. As threats evolve, insurance providers must take steps to improve transparency and support their customers in understanding coverage. Creating standardized, plain-language policy summaries could be a game-changer.
For their part, CISOs need to view cyber insurance not as a standalone solution but as part of a holistic security strategy. Insurance can mitigate financial impact, but it cannot repair reputations or restore customer trust. Investments in technology, training, and proactive risk management remain paramount.
Knowledge is Power
Today, CISOs cannot afford uncertainty about their most critical safety net. The survey highlights not just a knowledge gap but also an opportunity for CISOs to reframe how they approach cyber insurance. By understanding their policies, engaging with insurers, and aligning coverage with their organization’s unique risk profile, CISOs can transform cyber insurance from a reactive safeguard into a strategic asset.
As the stakes rise, one thing is clear: clarity isn’t optional—it’s essential.
About the Author
Denny LeCompte is the CEO of Portnox, a leading provider of cloud-native, zero trust access control solutions, where he is responsible for overseeing the day-to-day operations and strategic direction. Denny brings over 20 years of experience in IT infrastructure and cyber security. Prior to joining Portnox, Denny held executive leadership roles at leading IT management and security firms, including SolarWinds and AlienVault. Denny holds a Ph.D. in cognitive psychology from Rice University. Denny can be reached online at https://www.linkedin.com/in/dennylecompte and at our company website https://www.portnox.com/.
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