Cyber Insurance: Your Business’s Safety Net in a Digital Storm

60% of small businesses close within six months of a cyberattack. Cyber insurance can be the difference between survival and shutdown. But to qualify—and to actually benefit from it—you need to have your cybersecurity act together.

What Is Cyber Insurance?

Cyber insurance is a specialized policy that helps businesses recover from cyberattacks and data breaches. It's designed to minimize the financial fallout and disruption caused by everything from ransomware to phishing attacks to system compromises.

Policies typically include:

• First-party coverage: Covers the direct costs your business might face, such as data restoration, legal and forensic services, breach notification to customers, and revenue loss due to downtime.

• Third-party coverage: Covers costs related to legal claims by customers or partners, regulatory fines, and settlements.

Cyber insurance doesn’t stop the breach, but it does make recovery faster, cheaper, and less stressful in the unfortunate event that you do fall victim to a cyberattack. 

Even when you have cybersecurity defenses and protocols in place, there's always a small chance something can slip through. Cyber insurance ensures you're prepared for that small—but serious—risk.

What Do Insurers Look For?

Insurers assess your “cyber hygiene” before offering a policy or determining rates. Here’s what they typically expect:

• Multi-Factor Authentication (MFA): A must-have for securing logins to cloud accounts, admin dashboards, and remote access tools.

• Employee Security Awareness Training: Your people are your first line of defense. Training reduces risk from phishing and social engineering.

• Regular and Verified Data Backups: Backups should be frequent, tested, and stored securely to qualify.

• Strong Access Controls & Password Policies: Includes use of password managers and enforcement of complex, unique credentials.

• Endpoint Protection: Antivirus, anti-malware, and device management that includes real-time monitoring.

Failing to implement these controls can either drive up your premiums—or worse, result in denial of coverage altogether.

What Does It Cost?

Cyber insurance has become more accessible, especially for small businesses. Here’s a general breakdown:

• Monthly Cost: Typically $30 to $200 depending on your risk profile

• Annual Premiums: Usually fall between $1,000 to $5,000 for small teams

Several factors impact your rate:

• Revenue and number of employees

• Industry risk (e.g., healthcare and finance tend to pay more)

• Volume of sensitive data handled

• Past claim history

• Your cybersecurity infrastructure and readiness

Being proactive about your security posture isn’t just safer—it can save you money.

Compliance Is Key

Many cyber insurance providers now require some form of compliance with cybersecurity frameworks to approve coverage. Common frameworks include:

• NIST CSF (National Institute of Standards and Technology)

• HIPAA (for healthcare organizations)

• PCI-DSS (for businesses handling credit card data)

Falling short on compliance can lead to:

• Higher premiums or policy exclusions

• Claim denial during a breach

• Legal or regulatory penalties

The key takeaway: cyber insurance and compliance go hand in hand. The more aligned your business is with established frameworks, the better your chances of qualifying—and actually benefiting from—a policy.

How Lockwell Helps

Lockwell simplifies the entire journey from “unsure” to “fully insured.” Whether you’re applying for coverage or trying to stay compliant, we’ve got you covered:

• Built-in Security Controls: From MFA to daily backups, Lockwell includes the protections insurers expect—automatically.

• Elle, Your AI Compliance Officer: Elle maps your current posture to NIST standards, tracks evidence, and flags gaps in real time.

• Audit-Ready Reporting: Generate executive summaries, compliance reports, and risk assessments with a click—perfect for insurer questionnaires or board updates.

• Ongoing Monitoring: No need for spreadsheets or manual checklists. Lockwell’s dashboard shows your live readiness score, issue backlog, and compliance health.

• Incident Response Playbooks: Should a breach occur, Lockwell activates workflows and pre-written action plans that demonstrate best practices to your insurer and limit damage.

Lockwell doesn’t just make compliance easier. It proves you’re serious about security—something insurers love. And that can translate directly into premium discounts.

Final Thoughts

Cyber insurance is your financial fallback. Lockwell is your operational frontline. Together, they create resilience—protecting your business before, during, and after an incident.

Want to know if you’re ready for coverage? Request a Risk Assessment and take the first step toward peace of mind.