<p>Since its emergence in the 1990s, cyber insurance has become a critical part of enterprise risk management. Initially an offshoot of errors and omissions insurance, cyber insurance coverage, which was limited in scope, swiftly matured as companies became more reliant on data and technology — and as attackers posed a greater threat.</p>
<p>Cyber insurance, also known as <i>cyber liability insurance</i>, is a commercial product that transfers financial risk arising from cyberattacks to a third party, helping victims recover from financial losses and <a href=”https://www.techtarget.com/searchdatamanagement/feature/Operational-resilience-is-a-benchmark-for-executive-success”>operational disruptions</a>. While terms vary from policy to policy, insurers typically cover a range of scenarios, including data breaches, <a href=”https://www.techtarget.com/searchsecurity/tip/10-common-types-of-malware-attacks-and-how-to-prevent-them”>malware</a>, social engineering attacks, system failures and business interruptions. According to MarketsandMarkets, the cyber insurance market, <a href=”https://www.insurancebusinessmag.com/us/news/cyber/global-cyber-insurance-market-could-hit-new-highs-by-2030-gallagher-forecasts-562203.aspx” target=”_blank” rel=”noopener”>valued</a> at $16.5 billion in 2025, is forecasted to grow to $32 billion by 2030.</p>
<section class=”section main-article-chapter” data-menu-title=”Do organizations really need cyber insurance?”>
<h2 class=”section-title”><i class=”icon” data-icon=”1″></i>Do organizations really need cyber insurance?</h2>
<p>The FBI, in its IC3 Internet Crime Report, <a href=”https://www.ic3.gov/AnnualReport/Reports/2025_IC3Report.pdf” target=”_blank” rel=”noopener”>disclosed</a> losses exceeding $20.8 billion as a result of cybercrime in 2025, a 26% increase from the prior year. Despite elevated cybersecurity awareness and sophisticated defenses, no organization is immune to digital threat actors.</p>
<p>The fallout from data breaches has grown more severe, too. Beyond financial damages, organizations recovering from a cyberattack potentially face negative press, <a href=”https://www.techtarget.com/searchdisasterrecovery/tip/How-to-manage-and-mitigate-reputational-risk”>loss of public trust</a>, <a href=”https://www.techtarget.com/searchcio/feature/Regulatory-trends-every-CIO-should-watch”>regulatory costs and concerns</a>, unanticipated business disruptions and legal action from stakeholders. A successful data breach can easily cost millions and affect a company for years.</p>
<p>Traditional business insurance does not cover cybersecurity risks; cyber insurance carriers offer the only contract model that can help an operation get back on its feet after a breach. In recent years, businesses of all sizes and across industries have discovered the benefits and risks of cyber insurance coverage. The following incidents are a few of the high-profile data breaches that occur all too often, and highlight how cyber insurance policyholders responded.</p>
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<section class=”section main-article-chapter” data-menu-title=”Cyber insurance carrier breached”>
<h2 class=”section-title”><i class=”icon” data-icon=”1″></i>Cyber insurance carrier breached</h2>
<p>The CNA Financial Corporation breach is one of the most significant ransomware incidents to affect the insurance industry, particularly because CNA itself is a major provider of cyber insurance.</p>
<p>In March 2021, CNA disclosed that it had suffered a sophisticated cyberattack that disrupted its network and internal systems, including corporate email and employee services. The attack was later identified as ransomware, widely attributed to the Russian-linked Evil Corp/Phoenix group. It reportedly encrypted more than 15,000 devices across the company’s network, including remote systems connected via VPN. This widespread disruption forced CNA to shut down parts of its IT infrastructure and engage forensic experts and law enforcement to investigate the breach.</p>
<p>CNA decided to pay approximately <a href=”https://www.cybersecuritydive.com/news/cna-financial-ransomware-payment-treasury-sanctions/600591/” target=”_blank” rel=”noopener”>$40 million in ransom</a>, negotiated from a $60 million demand, to regain access to its systems. At the time, it was one of the largest publicly known ransomware payments.</p>
<p>Cyber insurance played a paradoxical role in this event. As a leading cyber insurer, CNA offered policies designed to help other organizations recover from cyberattacks, including coverage for ransomware incidents, business interruption and incident response services. However, in its Securities and Exchange Commission filings, CNA said its cyber i
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