LONDON — A Washington-based company headed by former U.S. Homeland Security Secretary Tom Ridge has teamed with reinsurance brokerage Guy Carpenter & Co. L.L.C. to offer a cyber security and insurance product, the companies announced Monday.

Mr. Ridge's new company, Ridge Insurance, is a managing agency at Lloyd's of London.

The coverage will be underwritten by five Lloyd's syndicates — co-leaders Aegis London syndicate 1225, Brit Group's syndicate 2987 and Novae Group P.L.C. syndicate 2007 — and Barbican Insurance Group's syndicate 1955 and Ace Ltd.'s syndicate 2488.

The product consists of an initial onsite assessment of existing cyber security capabilities that must be purchased up front and carried out by Ridge Insurance, said Mr. Ridge, chairman of Ridge at a briefing in London Monday.

The product also contains a cyber privacy and network protection insurance policy including coverage for business interruption, privacy and security liability, crisis and event management costs, information assets and cyber extortion.

The policy provides worldwide coverage with a limit of $50 million.

The third part of the product provides remediation services in the event of a cyber breach.

The product is specifically designed for companies with a market capitalization of less than $500 million — which represents about 80% of all U.S. publicly quoted companies, Mr. Ridge said.

“The digital sun is never going to set,” said Mr. Ridge. “The promise and the peril of the cyber world is with us every day,” he added.

Mr. Ridge said that central to the offering was the assessment of companies' cyber security which will operate a traffic light system whereby companies with robust cyber security will be given a “green light” and will be offered insurance, companies with some work to do on cyber security will be deemed to be a “yellow light” and will need to undergo changes before insurance is underwritten.

Those companies whose cyber security is of “red light” level will need to undergo a thorough overhaul of cyber security before insurance is written.

Asking companies to pay for this assessment before offering insurance coverage gives a sense of the buyers' commitment to cyber security, noted Mr. Ridge.

Mr. Ridge will work with companies year round to help them remain robust against cyber threats, he said.

Recent high profile cyber security breaches have resulted in increased demand for cyber coverage noted Rick Welsh, head of cyber insurance at Aegis in London.

But until now “the security piece was not necessarily well aligned with the product,” he said.