Is Cyber Insurance Worth It?

Written By Eden Kuflik

What Businesses Need to Know in 2025

Why Cyber Insurance Isn’t Optional Anymore

As digital threats increase in scale and sophistication, more organizations are realizing that traditional cybersecurity tools alone are no longer enough. Even with the strongest security posture, one click on a phishing email or one overlooked update can lead to a devastating breach. That’s why cyber liability insurance has become a non-negotiable line item for businesses of every size.

At Obsidian IT, we help our clients not only prevent cyber threats but also ensure they’re in the best position possible to qualify for, and benefit from, cyber insurance coverage.

What Is Cyber Liability Insurance?

Cyber insurance is a specialized policy designed to protect businesses from the financial impact of cyberattacks, data breaches, and system outages. Depending on the policy, coverage may include:

  • Incident response costs (forensics, legal, and notification)

  • Business interruption losses

  • Ransomware payment reimbursements

  • Liability for leaked customer or employee data

  • Regulatory fines and penalties

But here’s the kicker: insurance companies now demand proof that your organization is actively mitigating risk. That’s where partnering with an MSP like Obsidian IT makes all the difference.

Insurers Are Raising the Bar, Can You Qualify?

Due to the increase in ransomware and high-profile breaches, underwriters have tightened their requirements. Companies that fail to meet certain security controls may be denied coverage or face sky-high premiums.

Here are just a few baseline requirements we help clients meet:

  • Multi-Factor Authentication (MFA): Required for email, remote access, and admin accounts

  • Regular Data Backups: Including proof of recovery testing

  • Endpoint Protection: Antivirus and real-time threat monitoring

  • Employee Security Training: Ongoing education to reduce human error

  • Incident Response Plan: Documented and regularly tested

  • Audit-Ready Documentation: Evidence of controls and security measures in place

Obsidian IT has bundled all these essentials into our Cyber Insurance Readiness Checklist.

Cybersecurity Risk Isn’t Just a Big Business Problem

It’s a common misconception that cybercriminals only target large corporations. In reality, over 40% of cyberattacks target small to midsize businesses, most of which lack the time or internal resources to maintain layered protection.

Obsidian IT works with businesses across Northern California and beyond to implement right-sized cybersecurity strategies. Whether you have five employees or fifty, we can help you reach compliance benchmarks and reduce your cyber risk—before an attack, and before your next policy renewal.

The Real Cost of Being Uninsured

A single breach can cost hundreds of thousands of dollars in damages, downtime, and reputation loss. And without cyber insurance, every dollar comes out of your bottom line.

We’ve seen first-hand how being underinsured, or completely uninsured, can set a business back for months. With Obsidian IT as your partner, you can improve your insurability and build a resilient infrastructure that insurers and customers trust.

Ready to Protect Your Business and Secure Coverage?

Let us help you prepare. We’ll guide you through the essential safeguards needed for cyber insurance and provide documentation to meet insurer expectations.

Download our Cyber Insurance Readiness Checklist and schedule a call to talk about how we can implement or improve your protections.

Eden Kuflik