How SBOM Transparency Will Reshape Future Cyber Insurance Exclusions
By Priya Natarajan – Software Supply Chain Risk Consultant & Former Cyber Underwriter
Two years ago, I could ask a prospect, “Do you track critical open source components?” and receive a confident “Yes”—followed by a spreadsheet last updated eight months prior. Today, some of those same companies deliver machine-generated SBOM feeds with transitive dependency depth, vulnerability aging metrics, and signed attestations. Progress is real. Insurers are watching—and preparing policy language for the next phase: allocating loss responsibility when known vulnerable components go unremediated.
Why SBOM Visibility Is a Double-Edged Sword
SBOM adoption reduces unknown risk surface, but it also destroys plausible deniability. When a carrier can show (post-claim) that you knew a critical library (e.g., an exploitable logging framework) was aged and unpatched for 120 days, expect sharper coverage scrutiny.
Regulatory & Market Catalysts
- Executive Order 14028 (U.S.) accelerated federal emphasis on software supply chain transparency. EO 14028
- NTIA SBOM Initiative provided baseline elements (supplier, version, dependency relationship). NTIA SBOM
- CISA SBOM FAQs & Guides continue to frame implementation maturity. CISA SBOM
- NIST Secure Software Development Framework (SSDF, SP 800-218) anchors secure build practices. NIST SSDF
- OpenSSF & Supply-chain Levels for Software Artifacts (SLSA) push integrity / provenance advances. OpenSSF
Underwriting Shift: From Presence to Quality of Evidence
Where 2023 underwriting asked “Do you maintain an SBOM?” 2025 underwriting is probing:
- How frequently are SBOMs regenerated (build-time vs quarterly batch)?
- Do you track time-to-remediation for high CVSS issues per component?
- Are critical components signed & provenance-verified?
- Are build pipelines isolated, reproducible, and tamper-evident (SLSA levels)?
- Is there an exception process with documented risk acceptance for deferred patches?
Anticipated Exclusion Evolution
| Emerging Focus Area | Likely Policy Language Trend | Risk Response Recommendation |
|---|---|---|
| Known Unpatched Component | Clarifying wording limiting coverage where a “publicly disclosed critical vulnerability remained unremediated beyond X days absent documented compensating control” | Implement SLA tiers (e.g., Critical: 14 days, High: 30) + waiver log |
| Integrity / Tampered Build | Explicit carve-outs for compromise via unsigned or unverified build artifacts | Adopt artifact signing (Sigstore / cosign) + attestations stored immutably |
| Unsupported / End-of-Life (EoL) Libraries | Narrowing failure-to-maintain exclusions to cite EoL dependencies | Quarterly EoL inventory review + modernization backlog tracking |
| Third-Party Component Misuse | Distinguishing between upstream flaw vs. negligent integration | Threat model critical libraries (auth, serialization) + code review signoff |
| License / IP Violations | IP exclusions referencing open source license non-compliance causing claims | Centralized license policy + automated scanning (e.g., FOSSA, FossID) |
These trends echo historic evolution in property policies (maintenance warranties) and tech E&O (patch management clauses). Transparency sharpens duty-of-care expectations.
Practical Maturity Ladder (Self-Score Before Renewal)
| Level | Descriptor | Characteristics | Underwriting Impression |
|---|---|---|---|
| 0 | Ad Hoc | Manual spreadsheets, partial inventory | High unknown exposure |
| 1 | Basic | Automated scan of direct deps monthly | Slight improvement; still reactive |
| 2 | Intermediate | Build-time SBOM, priority CVE triage SLAs | Shows process discipline |
| 3 | Advanced | Signed artifacts, transitive dependency tracking, remediation metrics dashboard | Attractive, potential premium credit narrative |
| 4 | Leading | SLSA-aligned pipeline, provenance attestations, cryptographic policy enforcement, risk acceptance committee minutes | Differentiated; may influence broader terms |
Metrics That Matter (Include in Submission Addendum)
| Metric | Why It Resonates | Target Benchmark |
|---|---|---|
| % Components with Known Critical Vulnerabilities > SLA | Demonstrates remediation discipline | <2% |
| Median Time-to-Remediate Critical | Speed of risk reduction | <10 days |
| SBOM Generation Frequency | Indicates freshness | Per build / release |
| % Signed Build Artifacts | Integrity assurance | >85% (rising to 100%) |
| % Components with Verified Provenance | Supply chain trust | >80% |
| EoL Dependency Count (Critical Apps) | Technical debt transparency | 0–2 accepted w/ plan |
Track these for 2 quarters before renewal to show trend, not just a snapshot.
Implementation Roadmap (180 Days)
| Phase | Duration | Key Actions | Output |
|---|---|---|---|
| Inventory | 0–30 days | Aggregate dependencies (direct + transitive), tag critical apps | Baseline SBOM set |
| Harden Build | 30–75 days | Introduce artifact signing, isolate CI runners, enable provenance attestations | Integrity uplift |
| Remediation Discipline | 60–120 days | Enforce SLA timers, auto-ticket critical CVEs, exception workflow | Aging reduction |
| Governance & Reporting | 90–150 days | Dashboard KPIs, quarterly risk committee review | Auditable oversight |
| Renewal Packaging | 150–180 days | Create SBOM & Supply Chain Addendum with metrics trend | Underwriting differentiator |
Internal Addendum Outline (Give This to Your Broker)
- Executive summary (1 paragraph): Dependency surface & maturity highlight.
- SBOM scope: Build systems covered, languages, % of repos included.
- Toolchain: SCA scanner(s), signing tools, pipeline controls (brief bullet list).
- Metrics snapshot vs. prior quarter (table + arrows for trend).
- Exception register summary (count by risk level + max age).
- Remediation SLA policy excerpt (one page max).
- Governance cadence (who meets, how often, evidence retained).
Frequently Asked Questions
Will carriers mandate SBOM submission? Some specialty markets already request attestation or sample SBOMs for high-limit tech risks; broader adoption likely as formatting (e.g., CycloneDX, SPDX) standardizes.
Could SBOM transparency reduce premiums? Direct numeric credits are rare today, but stronger negotiation around exclusions, sublimits, and incident response panel flexibility is achievable when maturity is evidenced.
Do I need full transitive depth? For critical applications, yes—transitive vulnerabilities (think nested logging/util packages) often become systemic exploit paths.
External References & Further Reading
- U.S. Executive Order 14028 – Improving the Nation’s Cybersecurity: https://www.whitehouse.gov/briefing-room/presidential-actions/
- NTIA SBOM Guidance & Minimum Elements: https://www.ntia.gov/
- NIST Secure Software Development Framework (SP 800-218): https://csrc.nist.gov/publications
- CISA Secure Software Development / SBOM Resources: https://www.cisa.gov/
- OpenSSF (Best Practices, SLSA, Scorecards): https://openssf.org/
Bottom Line
SBOMs are transitioning from transparency artifact to duty-of-care evidence. That shift empowers insurers to refine exclusion wording around known neglected vulnerabilities, integrity failures, and unsupported components. Treat SBOM maturity like early MFA adoption: get ahead, gather metrics now, and narrate progress. The payoff is not just potential rate stability—it’s preserving broad insuring agreements in a tightening language environment.
Priya Natarajan advises SaaS and critical infrastructure vendors on software supply chain assurance and previously drafted cyber underwriting guidelines for a global carrier.