Cyber insurance is a critical tool for businesses facing the looming threat of a major cyber incident. A panel of cyber insurance experts said Thursday during the ACC Foundation Virtual Cybersecurity Summit that insurers have become more aware of the risks. Before writing a policy, insurers want to examine everything a business is doing to mitigate a cyberattack.

In the early days of the cyber insurance market, there was a lot of competition. Risks and coverage were not very well understood, and businesses were incentivized to buy this kind of insurance, said James Steel, director and counsel at American Express Co. in New York.