Overview
Cyber insurance is not a cybersecurity substitute. For small and medium-sized enterprises (SMEs), it is a recovery-financing decision for losses the business cannot reasonably prevent, absorb, or restore alone.
Executive decision: authorize a 90-day cyber-insurability decision pack. Bind coverage only when management has quantified a credible loss scenario, approved the retained loss, and confirmed that policy wording supports the operating model required during an incident.
Scope note: Market evidence and regulatory examples in this article are primarily U.S.-based. Organizations operating elsewhere should apply this decision model to their local insurance market, legal duties, contractual obligations, and incident-reporting requirements.
What Is Happening
NAIC’s 2025 Report on the Cybersecurity Insurance Market, based on 2024 U.S. data, recorded nearly 50,000 cyber-insurance claims—an increase of almost 40 percent from the prior year. The report also identifies ransomware, business interruption, litigation, regulatory investigations, identity-based intrusions, and third-party dependency as increasingly complex …