What businesses need to know about cyber insurance in 2025

Cyber insurance was once an optional add-on for business. It's now becoming a requirement. 

With cyber incidents rising dramatically and the potential for significant financial loss, cyber insurance acts as a critical safety net. It's no longer a question of if you'll be hacked, but when you'll be hacked. What you have in place today could be the difference between staying in business or shutting down tomorrow. 

We’ve seen first-hand how AI can drive efficiency and innovation. But we also recognize that it’s not a one-size-fits-all solution. Businesses need to critically look at their operational needs before deciding how AI fits into their strategy.

The biggest misconceptions about cyber insurance

Many businesses assume they are covered under their existing insurance policies, but cyber liability is often a separate item. They also assume that working with a Managed Service Provider (MSP) means automatic coverage. It doesn’t. Each business needs its own policy.

Additionally, businesses often rush through cyber insurance forms, checking boxes without fully understanding the requirements. If you can’t prove you have the necessary technologies and processes in place, your claim may be denied. This is why reviewing your policy with an expert is essential.

How the cyber insurance market has evolved

In 2025, the total economic impact of cybercrime in the US is estimated to be $350 billion, according to industry projections. Reported losses alone are climbing to nearly $15 billion.

Since 2021, the number of businesses affected by cybercrime has risen by nearly 70%. This is caused by increasingly sophisticated attacks such as phishing. These scams have surged and are fuelled by AI which helps craft highly customized and convincing emails.

Obviously, this escalation has also led to a surge in cyber insurance claims, prompting insurers to enforce stricter requirements such as multi-factor authentication, endpoint protection, and regular training. Premiums are rising, coverage limits are tightening, and exclusions are growing, making it critical for businesses to stay proactive and informed in order to secure affordable protection.

Most common cyber insurance claims

The most common claims businesses are submitting for cyber insurance include:

• Ransomware attacks: Demands for ransom payments after systems are encrypted.
• Business email compromise (BEC): Fraudulent email schemes leading to unauthorized fund transfers.
• Data breaches: Exposure of sensitive customer or employee information.
• Phishing attacks: Social engineering tactics to steal credentials and gain access.
• Third-party vendor breaches: Security incidents involving external service providers. These common claims highlight the critical need for businesses to implement strong cybersecurity measures to reduce risk and secure favorable insurance terms.

What to consider when choosing a cyber insurance policy

When selecting a cyber insurance policy, businesses should consider key factors such as:

• Coverage limits: Ensure the policy covers the potential financial impact of breaches, including legal fees, recovery costs, and reputational damage.
• Exclusions: Understand what is not covered, such as certain types of attacks, outdated systems, or inadequate security measures.

Incident response requirements: Some policies require businesses to have an incident response plan in place, including specific tools and processes for managing breaches. Evaluating these elements helps businesses choose a policy that not only meets their needs but also aligns with their cybersecurity posture and risk tolerance. 

Proactive steps to reduce cyber risk

Cyber insurers spend millions researching the best software and services to mitigate losses. Even if you don’t have cyber insurance yet, adopting these guidelines which are easily accessible online can protect your business and prepare you for future coverage. Listening to the experts ensures your defenses are aligned with industry best practices.

How iVenture can support your business 

We work with clients to create comprehensive IT roadmaps, including cybersecurity protections that meet insurance standards. We also help clients ensure their forms are accurate and advise on cost-effective ways to meet insurer requirements.

We have an in-house Security Operations Center that is led by our Chief Information Security Officer. They ensure we stay up to date with industry changes and help our clients do the same. With a dedicated team of cybersecurity professionals, we can confidently provide guidance, protect our clients, and remediate incidents when and if they occur.

Invest in cyber insurance today. We’re here to help you every step of the way.