Ransomware attacks have evolved beyond merely encrypting files; they now involve stealing data and threatening to leak sensitive information. This shift has made cyber insurance not just advisable but essential.
Ransomware attacks have evolved beyond merely encrypting files; they now involve stealing data and threatening to leak sensitive information. This shift has made cyber insurance not just advisable but essential.
In 2024, ransomware incidents surged, with a 75% increase in average weekly cyberattacks per organization compared to the previous year, reaching an all-time high of 1,876 attacks per week. The FBI reported a 9% rise in ransomware complaints targeting U.S. critical infrastructure sectors, including healthcare, manufacturing, and financial services.
Jeffery Lauria, Chief Information Security Officer at iCorps, draws a parallel: "You drive, you buy auto insurance because you might get into an accident, right? You buy a homeowner's insurance because something may happen,” he said. It's the same with cyber insurance—it protects you from something that’s increasingly likely.
What was once considered a backup plan is now a survival tool. Attackers are more aggressive, regulatory fines—often calculated per exposed record—are harsher, and insurers now expect companies to document their frameworks, deploy endpoint protection, and monitor threats around the clock. “We ask about their cybersecurity insurance—that they have it—and more importantly, does it extend back to their vendors,” Jeffery noted.
This is especially urgent for healthcare, legal, and financial firms facing higher stakes and greater exposure. Assuming a basic policy is sufficient—or neglecting preparation entirely—leaves businesses dangerously exposed.
Cyber insurance helps businesses cover the financial fallout of a ransomware attack, data breach, or system outage. This can include ransom payments, system recovery, legal fees, or breach notifications. But its real value lies in planning for when—not—if a security event disrupts your business.
Jeffery put it plainly: "There is a probability that you'll have a security-related event. Ideally, your goal is to ensure that the security-related event is isolated and contained. But when it's not, it is extremely costly to recover."
Ransomware attacks no longer stop at encryption. Threat actors now steal sensitive data and threaten to leak it, raising the stakes beyond what backups can solve. "Data being leaked out is very costly," Jeffery said, pointing to compliance penalties and public trust.
It’s not just large companies under pressure. Even 25- or 50-user organizations can face recovery costs in the hundreds of thousands. And that's before factoring in legal liability or breach notifications, which vary by state and industry.
Expectations from other businesses have also changed. During due diligence, companies now ask whether a vendor has cyber insurance and whether that coverage extends to their partners. Cyber insurance isn't just a safety net; it's a signal of operational maturity.
The costs of a cyberattack can quickly add up, from investigation to lawsuits. That's why most cyber insurance policies are designed to cover five key areas: investigation, downtime, ransom payments, system recovery, and legal liability.
Neal Hartsell, Chief Marketing Officer at Gradient Cyber, broke it down this way:
But not everything is covered. Hartsell pointed to three standard exclusions:
Jeffery warned that policy limits can be misleading: "A $1 million policy sounds like a lot. It sounds like a lot, but it may not be enough in most cases. Restoring a typical company to a working state may take weeks of labor and could cost you $200,000."
Even a well-written policy has gaps. Restoration may be covered, but productivity losses often aren't. Without proper documentation, reimbursement could be denied.
Cyber insurance premiums for mid-market companies typically range from $5,000 to $100,000 annually, depending on risk factors. That range reflects insurers' price risk based on the likelihood of a breach and the potential recovery cost.
Some industries will always pay more. Healthcare and financial services, for example, are frequent targets and face heavier compliance burdens. If your company handles sensitive records or operates in a highly regulated space, insurers will assume more risk and charge accordingly.
Security maturity is another key factor. Businesses without foundational protections, like multi-factor authentication or endpoint detection, tend to see higher premiums. Some may even be denied coverage if they can't show proof of basic controls.
A company's breach history also plays a role. If you've suffered a past incident, insurers may treat you like a driver with a record of accidents. You'll still get a policy—it just won't be cheap.
Third-party exposure can also increase costs. Companies that rely on vendors, contractors, or cloud platforms expand their risk footprint, and insurers take that into account.
As Neal put it, insuring a business with poor security hygiene is like covering an 18-year-old son on a car policy: "If you have an 18-year-old son, you can get car insurance for him. It will cost you more than it would for an 18-year-old daughter."
Premiums aren't arbitrary. They reflect how prepared—or exposed—your business is.
Strengthen your defenses before you fill out a cyber insurance application. Neal outlined five practical steps every company should take before approaching an insurer.
Identify your gaps, evaluate what's in place, and understand what insurers will see when they assess your environment. It's not a checklist—it's how you avoid surprise denials or inflated premiums.
You'll need multi-factor authentication (MFA) and endpoint detection and response (EDR) at a minimum. Ideally, that extends to managed extended detection and response (MXDR), which provides 24/7 monitoring and faster threat containment.
Most breaches don't come from zero-day exploits—they start with an employee clicking the wrong link. Ongoing phishing awareness training helps reduce one of the most common attack vectors. As Neal put it, “employees are not most nefarious by nature, but they are careless. It's just our nature as humans."
You need a documented process even if you haven't been hit yet. Who do you call? What systems get shut down? What needs to be reported? A clear IR plan shows insurers you're serious about limiting damage.
Finally, get help from people who do this every day. A managed security service provider (MSSP) like iCorps can guide you through the above, align you to a recognized framework, help you implement controls, and document your readiness.
Preparation isn't optional. Skip it, and you might not qualify—or worse, you'll get a policy that won't hold up when you need it most.
Cyber insurance providers don't just write checks. They scrutinize your security—inside and out—before and after a breach. That's why working with a managed security service provider (MSSP) is essential.
Jeffery explained how insurers often start by examining your public-facing configuration. "They're going to look at your DNS records and ensure those look healthy. If they don't look healthy and are neglected, then that says a lot about everything else you may be doing." A misconfigured DNS record might seem small, but to an underwriter, it signals deeper risk.
This is where an MSSP steps in. First, they align your environment to a recognized security framework—whether it's NIST, CIS18, or a regulation specific to your industry. It becomes the standard both insurers use to assess you, and you use to manage your security.
From there, an MSSP performs gap assessments that mirror what insurers seek. Do you have endpoint protection in place? Is 24/7 monitoring active? Have phishing simulations been conducted? Have your backups been tested recently? These aren't just security questions. They're underwriting criteria.
MSSPs also help businesses implement and document the tools insurers want to see—MXDR, email filtering, multi-factor authentication, and privileged access controls. Having these tools in place is one thing. Being able to prove it during a claim investigation is another.
Jeffery made this point clear: "If you can't show that you've done the work—if you can't show the backup and restoration testing, or if you can't show that MDR or XDR is in place, if you can't show this, you have no proof—there is a possibility if an event happens, they're going to say, 'We’re not going to cover you.'"
In short, MSSPs make your security posture defensible. They protect your systems—but more importantly, they protect your ability to recover when it counts.
Cyber insurance isn't a fail-safe—it's one piece of a broader security strategy. Without preparation, even a well-written policy can fail when it matters most.
Jeffery emphasized that documentation is non-negotiable. Your claim could be denied if you can't prove that you've tested backups, configured controls, or trained employees.
That last point matters. Security isn't just the job of your provider or insurer—it's yours, too.
Neal said, cyber insurance isn't like car insurance, where they ask a few questions and write the policy. You've got to prove that you've earned it: "Either way, you've got to do the things that we talked about to prepare yourself, or you're not going to get on"
So, where should you start?
Cyber insurance can help you bounce back faster—but only if you've already done the work.
If you're ready to strengthen your posture and prepare for coverage, iCorps can help. Our team ensures you're ready, not just insured, from assessments to implementation to ongoing support. Get in touch with iCorps to schedule a readiness consultation.