We’re only halfway through 2025, and there have already been over 12,000 publicly disclosed data breaches. From small brick-and-mortar businesses to multinational tech companies, it’s clear that no organization is immune to a cybersecurity incident.
Preparation is key—and one increasingly vital part of shoring up against cyber-attacks is cyber insurance.
In this article, we’ll explore the state of play of cyber insurance in 2025, and help you understand whether it’s a good idea for your business.
Cyber insurance: A brief history
After years of turbulence and rising premiums, the cyber insurance market in 2025 appears to finally be on stable ground. New figures from consultancy Woodruff Sawyer show that two-thirds of businesses saw cost savings in their cyber insurance programs in 2024, and the firm forecasts pricing stability in the year ahead.
This marks a notable shift in a market that has, for much of the past decade, struggled to keep pace with the threat landscape.
In the 2010s, insurers found themselves trying to underwrite risk in a domain defined by unpredictability. As the severity and cost of security incidents climbed, insurers responded the only way they could—by sharply raising premiums, tightening eligibility criteria, and carving out major exclusions.
By 2023, many businesses found themselves priced out of meaningful coverage altogether, or stuck with policies riddled with caveats and sky-high deductibles. The market was, in effect, correcting for a period of aggressive growth based on underdeveloped models of cyber risk.
Why have cyber insurance premiums steadied?
Today, the cyber insurance sector seems to be entering a more sustainable phase. Several factors are behind this new equilibrium.
- Historical data: Underwriters now have access to more—and better—data. After years of claim history, insurers can assess how different types of attacks unfold and which controls actually make a difference. This allows for more nuanced modelling and pricing, reducing some of the guesswork that previously inflated premiums.
- Tighter policies: Policies have become tighter and more standardised. While this means fewer loopholes for policyholders, it also means insurers can cap their exposure more confidently. Many now exclude coverage for state-sponsored attacks or require policyholders to meet minimum security standards before a policy is issued.
- More security controls: Organisations are taking cyber risk more seriously—not only because of reputational damage, but because insurers are demanding it. This gives insurers greater confidence to differentiate between low- and high-risk clients. A company with strong controls, a clean claims history, and a demonstrated security framework will likely now pay significantly less than a peer with similar exposure but weaker safeguards.
Should you get cyber insurance?
Despite entering a period of stability, cyber insurance is still expensive. Average premiums remain a notable line item, particularly for small and mid-sized businesses operating on tighter margins.
Even so, it’s increasingly difficult to argue that cyber insurance is optional. Attacks are continuing to rise in volume and complexity. Generative AI has added a new layer of risk, making it easier for attackers to scale social engineering campaigns or extract sensitive data from tools embedded in everyday workflows. At the same time, regulators are tightening the rules, and consumers are far more aware of their data rights.
Against this backdrop, having financial support in the event of a breach is a smart move. More than that, cyber insurance is becoming a commercial expectation. Increasingly, customers and partners require proof of coverage before signing contracts or sharing data. Without it, some opportunities may be off the table altogether.
Saying this, it’s crucial to understand what cyber insurance is not. It is not a substitute for cybersecurity. It only kicks in once the damage is done.
To that end, businesses debating whether to invest in cybersecurity controls or cyber insurance should view it not as an either-or, but a clear hierarchy: prevention first, insurance second.
Strong controls not only reduce the likelihood of a breach—they also significantly lower insurance premiums. And as we’ve noted, many insurers now require baseline protections before they’ll even consider underwriting a policy.
How to lower your cyber insurance premium in 2025
In 2025, the clearest path to reducing your cyber insurance premium is to lower your risk profile. Insurers are no longer content to price policies on guesswork. The more robust your organisation’s cybersecurity posture, the more favourable your terms are likely to be.
Here are six key steps that insurers increasingly expect:
- Enforce multi-factor authentication and strong password policies. These are now considered baseline defences against account takeover attacks, which remain one of the most common entry points for malicious actors.
- Adopt a zero-trust architecture. This approach assumes no user or system is inherently trustworthy—reducing lateral movement within a network and limiting the blast radius of any breach.
- Deploy runtime data security tools. Runtime security tools monitor data flows in real time, preventing leaks and detecting suspicious behaviour before they turn into an incident.
- Invest in generative AI controls. With AI tools now embedded in daily workflows, security solutions like Polymer’s SecureRAG are becoming essential to maintaining AI data security.
- Prioritize security awareness training. Human error continues to be a leading cause of breaches. Insurers want to see evidence that employees practice cyber hygiene.
- Build a credible incident response plan. Knowing what to do when something goes wrong is just as important as prevention. A clear, rehearsed plan signals maturity to underwriters.
And for businesses ready to go further, obtaining certifications like SOC 2 or ISO 27001 can offer an added layer of assurance—demonstrating a commitment to structured, verifiable risk management practices.
Wrapping up
Ultimately, cyber insurance is not—and never will be—a silver bullet. It won’t stop a devastating attack. But what it can do is provide financial support when the worst happens.
To lower your premiums (and reduce the likelihood of an attack altogether) it’s wise to first focus on implementing security controls that bolster your cybersecurity posture. From there, you can invest in cyber insurance—and get a lower insurance premium, too.