Here’s why skipping out on cyber insurance is a really bad idea

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The cyber threat landscape has become more hostile than ever — and shows no signs of slowing down.

In 2023, there were 2,365 cyberattacks, with over 343 thousand victims, per the Identity Threat Resource Center. IBM reveals that the global cost of a data breach is the highest it’s ever been at $5.3 million. Global damages from cybercrime are projected to reach $10.5 trillion annually by 2025.

Ransomware, artificial intelligence (AI)-powered attacks, cloud vulnerabilities, and advanced phishing schemes are no longer emerging threats — they’re the new normal. Organizations must take measures to adapt quickly or risk catastrophic consequences.

Cyber insurance is one of those measures. It offers financial protection and support during an attack, ensuring continuity when systems fail or sensitive data is compromised. However, obtaining the right policy is not straightforward. Insurers demand a robust security posture, so organizations need to understand the most dangerous attack trends and align their cybersecurity initiatives to meet insurer expectations.

Ransomware doesn’t discriminate

Last year, 52% of respondents in The CISO Report revealed their organization experienced a ransomware incident that significantly impacted their business. Over 50% admitted to paying a ransom of more than $100,000.

The rise in double extortion tactics has exacerbated the damage. In these attacks, cybercriminals threaten to release sensitive data publicly, even if the ransom is paid. This strategy not only amplifies financial costs but also causes lasting reputational harm, significant recovery costs, potential regulatory fines, and prolonged operational disruption. Organizations that resist ransom demands often face prolonged downtime as they rebuild systems, adding to the losses.

And then, there are triple extortion tactics. Here, cybercriminals encrypt data, threaten to leak it, and also target an organization’s customers, partners, and stakeholders directly. Organizations need cyber insurance to mitigate all these risks.

Insurance policies can cover ransom payments, data recovery efforts, and operational losses, reducing the financial burden. As ransomware evolves, having this protection in place can mean the difference between recovery and insolvency.

Phishing exploits human vulnerabilities

Phishing attacks continue to exploit human error, leading to some of the most significant breaches in recent years. Verizon’s 2024 Data Breach Investigations Report (DBIR) found that “68% of breaches involved a non-malicious human element.” For example, social engineering tactics such as phishing, where attackers manipulate individuals into revealing sensitive information or granting system access.

Business email compromise (BEC) is a particularly costly variation of phishing. These attacks caused $2.9 billion in reported losses in 2023, per the FBI’s 2023 Internet Crime Report (ICR), as attackers posed as trusted executives or partners to authorize fraudulent wire transfers. These schemes are becoming increasingly convincing, leveraging detailed research to craft believable requests that catch even cautious employees off guard.

Cyber insurance provides a safeguard for these incidents, potentially covering direct financial losses and associated legal expenses. The costs of recovery — from forensic investigations to compliance fines — are often substantial. By including phishing-related coverage, organizations can protect themselves from the impact of these all-too-common attacks.

Cloud security gaps are exploited at scale

Cloud environments are indispensable for modern organizations, but their adoption has opened new avenues for cybercriminals. CrowdStrike’s 2024 Global Threat Report revealed cloud intrusions surged 75% in 2023, with incidents relating to cloud-conscious threat actors up 110% year over year.

These attacks often involve targeting cloud providers or exploiting shared responsibility gaps, where organizations mistakenly assume the provider is solely responsible for securing data. Once inside, attackers move laterally across environments, extracting sensitive information or disrupting operations at scale.

With cyber insurance, organizations can manage the fallout of cloud breaches by covering legal fees, forensic analysis, and public relations efforts. As organizations rely more heavily on cloud platforms, having this layer of financial protection is critical to maintaining resilience against these sophisticated attacks.

AI-powered attacks increase the stakes

Artificial intelligence (AI) is changing the cybersecurity game — for both defenders and attackers. AI-powered cyberattacks enable cybercriminals to automate phishing campaigns, identify vulnerabilities faster, and deploy sophisticated impersonation tactics. Deepfakes, for instance, have been used to convincingly mimic executives’ voices and appearances, leading to fraudulent transactions.

A Sapio Research and Deep Instinct report found that 85% of cybersecurity professionals attributed the rise in cyberattacks to AI-driven methods. Another study found that 97% of security professionals are worried that their organization will sustain an AI-generated security event.

Cyber insurance is evolving to address these emerging threats. Policies now include provisions for AI-related incidents, such as data breaches caused by deepfakes or malicious algorithms. For organizations, this coverage is becoming more critical than ever.

Finding a partner to help you combat cyber threats

As the threat landscape shifts, organizations need a partner they can trust to help them combat the growing risk. That’s where SHI comes in.

We equip organizations with the tools and expertise they need to stay secure and ahead of the threats. Our identity and access management (IAM) solutions enforce zero-trust principles, ensuring that only authorized users can access critical systems and data. This reduces the risk of breaches caused by human error or compromised credentials.

SHI also offers comprehensive threat and vulnerability management that helps organizations identify and remediate weaknesses before attackers can exploit them. From endpoint protection to advanced threat intelligence, our solutions are tailored to meet the unique needs of every organization. By partnering with SHI, organizations gain a trusted ally in the fight against cyber threats and show insurers they’re genuinely committed to security.

Cyber insurance is non-negotiable — but it’s not enough

The threats facing organizations today are not hypothetical. They are real. They are frequent. They are costly.

Ransomware, phishing, cloud vulnerabilities, and AI-driven attacks create risks that no organization can ignore. Cyber insurance provides a critical safety net, but its effectiveness depends on the readiness of your defenses.

By understanding the trends driving these risks and investing in comprehensive security solutions, you can protect your operations and ensure long-term resilience.

Don’t let evolving cyber threats put your business at risk. Contact SHI to strengthen your security posture and qualify for the cyber insurance coverage you need to protect your organization’s future.