Cyber Liability Insurance: How It Intersects with Identity Governance & Administration (IGA)

What is Cyber Liability Insurance?

Cyber Liability Insurance protects organizations from financial losses resulting from cyberattacks, data breaches, and other tech-related risks. In general, Cyber Liability Insurance covers losses associated with the theft of sensitive customer or employee information (e.g., credit card numbers, health records, personally identifiable information, etc.) and lost income from business interruptions, network security failures like malware, ransomware, and phishing attacks. It also compensates for claims to recover legal fees and fines associated with post-cyberattack regulatory compliance investigations and helps defray the costs of credit monitoring services for affected individuals to prevent them from falling victim to identity fraud.

The Rising Importance of Cyber Liability Insurance Against Evolving Cyber Threats

In Omada’s The State of Identity Governance 2025 report, more than six in ten (64.4 percent) IT and business leaders surveyed say their organizations have opted to carry Cyber Liability Insurance. While the concept of Cyber Liability Insurance is straightforward, the coverage against cyberattacks that these agreements provide can be complicated and often contains notable exceptions.

Cyber Liability Insurance is on the Rise, but Coverage may be Insufficient

Recent findings from Network Assured indicate that only 19 percent of businesses have coverage for security incidents exceeding $600,000 USD. With the average ransom paid by breached organizations topping $800,000 USD, many businesses may find themselves underinsured. In addition, insurers increasingly require stronger cybersecurity measures, including enhanced access controls, robust authentication protocols and a well-defined identity governance program – actions that all demonstrate an organization’s commitment to meeting insurers’ security requirements.

In this post, we’ll explain how effective Identity Governance and Administration (IGA) can reduce an organization’s risk profile and potentially lower Cyber Liability Insurance costs. You’ll learn how a robust IGA framework can fulfill critical cybersecurity and regulatory compliance needs and drive more favorable Cyber Liability Insurance coverage terms.

The Impact of Regulatory Compliance Requirements on Cyber Liability Insurance Premiums

Underwriters pay close attention to how well an organization observes data protection laws and cybersecurity standards. The ability to demonstrate adherence to regulatory compliance frameworks significantly impacts Cyber Liability Insurance premiums.

Insurers characterize organizations that meet or exceed regulatory requirements (e.g., GDPR, HIPAA, CCPA, or PCI DSS) as lower risk because they prove that they are already implementing strong cyber risk mitigation processes and data breach prevention strategies. At the same time, non-compliant organizations are classified as higher risk, face higher premiums, and may even be denied coverage until they close compliance gaps.

Regulatory frameworks often impose steep fines for data breaches and if underwriters must cover those costs, they are likely to compel organizations that cannot show compliance to pay higher premiums. Non-compliance with GDPR, for example, can result in fines of up to four percent of annual global turnover, which raises an insurer’s potential payout.

Regulations often require organizations to have comprehensive incident response readiness plans, conduct regular audits and cyber risk assessments. Having clear, documented compliance processes in place reduce the impact of a security breach and may put organizations in a stronger negotiating position to get lower premiums, better coverage terms, and higher policy limits.

IT executives should meet with insurance underwriters to clearly articulate their organizations’ security posture, underscoring successes and showing a roadmap to ongoing improvements in cyber risk mitigation. Providing this level of detail can help lower Cyber Liability Insurance premiums.

Best Practices for Implementing IGA for Cyber Risk Mitigation

Implementing robust identity governance practices goes together with satisfying regulatory compliance requirements. Modern IGA tools automate access management, maintain detailed audit logs, enforce the Principle of Least Privilege and Segregation of Duties (SoD), and provide access reviews and reporting capabilities. This combination of functionality enables organizations to meet regulatory standards efficiently, maintain a secure and compliant environment, and may help reduce Cyber Liability Insurance premiums.

For any organization, best practices for implementing IGA tools must address three business value drivers:

• Compliance – this is the key driver for industries that must document regulatory compliance
• Efficiency – this is the key driver for non-regulated industries that must onboard applications and ensure timely and secure access to many identities
• Security – this is a prerequisite for all organizations to ensure transparency and control of exactly who’s allowed to access what and when

Many organizations struggle with best practices to adhere to regulatory compliance and stay in control of security requirements in the face of continuous business demands to onboard new identities, applications, and data. Maintaining control, managing risk, and ensuring compliance without restraining business efficiency and collaboration is an ongoing challenge. Consider your organization’s move towards cloud applications and its needs for remote user access as well as your plans for merging outside infrastructures into your existing IT environments. It is critical to select a modern IGA tool that best serves organizational needs and integrates seamlessly into the IT infrastructure.

The Role of IGA in Data Breach Prevention

As we have discussed, robust data breach prevention is key for helping organizations satisfy regulatory requirements and negotiate more favorable cyber insurance terms. IGA is foundational to implementing a level of access control sufficient for organizations to do this effectively. Modern IGA also enables organizations to integrate key technologies such as multi-factor authentication (MFA) and privileged access management (PAM) that contribute significantly to cyber risk mitigation and help ensure regulatory compliance.

When administrators create identities for employees, contractors, vendors and other stakeholders in their IT architectures, they initiate an identity lifecycle management process for these users in the organization. Throughout the identity lifecycle, as users move around the organization their needs to access data, applications, and other resources change. Proper access control processes enable administrators to ensure users have access rights sufficient to perform day-to-day responsibilities in whatever role they are in. To maintain appropriate access control when a user has been assigned to a new department or region, or because they get promoted and require access to additional functionality in applications they already use, administrators must have the capacity to extend access rights across the entire IT architecture. Organizations must also implement tools that control the granting of user access rights and at the same time ensure users adhere to compliance regulations such as SoD.

The Role of Omada Identity Cloud Plays in Reducing Cyber Liability Insurance Costs

Modern IGA solutions are based on Zero-Trust Security principles and Omada Identity Cloud provides an automated implementation of business workflows and processes that enable organizations to demonstrate robust identity governance and regulatory compliance and plays a critical role in lowering Cyber Liability Insurance costs.

Omada Identity Cloud enables organizations to implement effective identity governance and compliance management by providing complete visibility into all identity-related activities. Clear audit processes help organizations understand and show what happened, when, and why. End-to-end oversight of access rights and controls make meeting regulatory requirements, safeguarding sensitive data, and maintaining an audit-ready posture dramatically easier.

Omada Identity Cloud centralizes access governance and automates policy enforcement through a single interface that simplifies managing user identities and permissions across multiple systems and helps organizations align with insurers’ requirements. This modern IGA platform streamlines audits, reduces insider threats, and strengthens overall security posture to deliver the cyber risk mitigation and data breach prevention functionality that insurance underwriters require.