Why Cybersecurity Firms Are Locked Out of Insurance Panels
- Steven Barge-Siever, Esq.
- 11 hours ago
- 2 min read
The Problem Most Cybersecurity Firms Run Into
Cybersecurity firms that operate before a breach - monitoring systems, detecting threats, and reducing risk - often assume that strong performance will lead to deeper involvement in the insurance process.
In practice, that rarely happens.
When a breach occurs, the insurer controls the response. If you are not on their panel, you are not involved - regardless of how effective your product is.
What Are Cyber Insurance Panels?
Cyber insurance policies rely on pre-selected vendor panels to handle breach response.
These panels typically include:
Incident response firms
Forensic investigators
Legal counsel
Crisis management providers
These vendors are not chosen at the time of the breach. They are selected in advance by the insurer and built into the claims process.
Why Most Cybersecurity Firms Are Excluded
1. Panels Are Limited and Controlled
Insurers maintain tight control over their vendor networks.
Panels are:
Small
Curated
Slow to change
If you are not already included, you are not being considered.
2. Selection Is Relationship-Driven
Panel inclusion is typically based on:
Existing relationships
Prior claims involvement
Historical performance with the insurer
Not on:
your platform
your detection capabilities
your ability to prevent breaches
3. The Decision Happens Before the Breach
This is the key constraint - You are not evaluated when a breach occurs.
If you are not already on the panel: you are not part of the response
4. Insurers Optimize for Claims - Not Prevention
Cybersecurity firms focus on preventing loss.
Insurers focus on managing loss after it happens.Those are fundamentally different objectives.
As a result:
The companies closest to the risk are not the ones controlling the outcome.
Why This Matters for Cybersecurity Firms
This structure creates real limitations:
You lose control at the most important moment
You are excluded from the response lifecycle
Your product is separated from the outcome
Your position in enterprise deals is weakened
From the buyer’s perspective, the insurer - not the cybersecurity firm - controls what happens when something goes wrong.
Why This Isn’t Likely to Change
Cybersecurity firms often assume they will eventually be added to insurer panels.
In reality:
Panels change slowly
Insurers have little incentive to expand them
Control is a core feature of the model—not a flaw
Even as new cybersecurity companies emerge, the structure remains largely the same.
The Structural Problem
The current model creates a disconnect:
Cybersecurity firms work to prevent the risk
Insurers control the response and the spend
These functions are not aligned.
And more importantly:
Cybersecurity firms are excluded from the part of the lifecycle that ultimately matters most to the customer.
What Leading Firms Are Starting to Do Instead
Rather than trying to gain access to insurer panels, some cybersecurity firms are taking a different approach.
They are structuring insurance alongside their own product.
This allows them to:
Stay involved after a breach
Cover the cost of response directly
Control how the outcome is handled
Instead of waiting to be selected: they are built into the outcome from the start
Learn More
If you’re exploring how this works in practice check out our website.
