Understanding the Real Cost and Coverage Behind 2025 Policies
Dive into the insights from a captivating episode of the One Step Beyond Cyber Podcast, hosted by our Founder and CEO, Scott Kreisberg. To suit your preference, we've transcribed the key takeaways into this blog post. If you prefer to watch the video version, the full podcast episode is linked at the end of the intro for your convenience. Podcast clips have been included following each section.
The cyber liability insurance market in 2025 remains stable, a rare and welcome state for the insurance industry.
Right now, businesses of all sizes and across nearly every industry can find policies that are not only affordable but also come with strong limits, enough to cover many of the incidents they’re most likely to face.
With competitive rates, expanded coverage, and new requirements, 2025 is a turning point for business owners who want strong protection without breaking the budget.
“Unlike most areas of insurance, cyber is soft right now,” notes Joseph Cook, cyber liability insurance expert from The Arizona Group. “There’s more appetite for it, and premiums are going down.”
In conversation with One Step Secure IT Founder and CEO, Cook provides an updated look at the state of cyber liability insurance as of mid‑2025, providing clarity for businesses that are still unsure about what it covers and why it matters.
Part of the credit goes to the fact that insurers have been seeing relatively healthy loss ratios. Add in fresh competition from new players entering the market, and business leaders get to enjoy a market where companies have more options than ever to transfer cyber risk.
Of course, threats haven’t slowed down. Ransomware attacks are still making headlines. Privacy lawsuits over website tracking tools are becoming more common. And schemes like business email compromise and social engineering; where criminals trick employees into sending money, continue to target smaller and less prepared companies that may not have a cybersecurity framework in place.
The good news? For now, insurers are setting premiums that work for any business while still meeting growth goals. That means, at least in the near term, we’re in a moment where strong cyber coverage is within reach.
Industry data backs up what Cook is seeing in the field. According to Gallagher’s 2025 market outlook.
“The cyber insurance market is stabilizing with competitive rates, ample capacity and enhanced risk management services.” Gallagher, 2025 Report.
Aon’s Q1 2025 report shows premiums down 7% year-over-year, a rare bright spot in commercial insurance pricing. Aon, Cyber Risk Insurance Market Remains Buyer-Friendly
Cook attributes this softening to reinsurance dollars flooding in:
“When reinsurance carriers invest more, it lessens liability for the insurer, which means they can reduce pricing, expand terms, and open coverage to more industries.”
Misconceptions That Can Leave Businesses Exposed
Although cyber liability insurance is far more recognized in the business world today, and may even seem more accessible, that doesn’t necessarily mean businesses are fully protected. Here are some of the most common misconceptions that still linger.
- “It’s only for big companies.”
Small and mid-sized businesses often assume they are too small to be targets. Attackers are increasingly going after smaller organizations with fewer defenses. - “My general liability policy covers cyber attacks.”
Traditional insurance typically protects against physical losses or injuries, not the complex costs of a cyber incident. Many found out the hard way that cyber coverage needs to be separate. - “Cyber insurance replaces cybersecurity.”
Some believed a policy meant they could scale back on security investments. Insurers often need strong safeguards to provide coverage. They may deny claims if these safeguards are not in place.
Cook warns that one of the biggest mistakes he sees is assuming outsourcing equals zero liability:
“It’s in the cloud, so it’s not my problem? That’s a myth. If there’s a breach, you’re still responsible, no matter where your data lives.”
Industry experts agree. The FTC reminds businesses that third-party vendors don’t automatically shield you from legal or regulatory obligations. FTC.gov
Another red flag is chasing the lowest premium without checking the fine print.
“There’s a wide variance in product quality. The cheapest policy may leave gaps you don’t realize until it’s too late,” says Cook.
Why Policy Language Matters More Than Limits
“If you can’t access your limit, it doesn’t matter how big it is,” Cook cautions.
One key section to review is the representations and warranties clause, the part that governs how your insurer treats your application at claim time.
Some carriers use “innocent nondisclosure” language, meaning they must prove deliberate misrepresentation before denying a claim. Others can void your policy for small inaccuracies.
Other clauses to watch:
- Sublimits for cyber crime or regulatory fines
- Time deductibles on business interruption coverage
- Exclusions for certain privacy laws or state-sponsored attacks
New Coverage Opportunities in a Soft Market
The current buyer-friendly environment means more coverage for modern risks. Cook points to excess cyber crime insurance as one example:
“If you move a lot of money, say you’re an accounting firm, you can now buy extra limits just for cyber crime, like funds transfer fraud or invoice manipulation.”
Coalition’s 2025 claims report confirms that business email compromise (BEC) losses are rising, with severity up 23% year-over-year. (Coalition)
Extra coverage in this area can be a smart investment.
Cyber liability insurance still isn’t required across the board, but it’s quickly becoming a must-have for any business that handles sensitive data.
“A cyber event can be devastating,” says Joseph Cook. “It’s not just the cost, it’s the reputational damage, the legal fallout, the operational downtime. Insurance won’t stop the breach, but it can give you critical support when you need it most.”
As threats grow more complex, insurers are responding with tighter requirements. That means your cybersecurity posture now plays a key role in whether you qualify for coverage—and whether claims will be honored when something goes wrong.
Recommended Reading: The Legal Implications of a Cyber Breach
When to Review Your Policy
“Don’t just wait for renewal,” advises Cook. “Any operational change, new markets, more sensitive data, new client contracts, can impact your coverage needs.”
And if your current provider isn’t meeting expectations, you don’t have to wait:
“It’s your business, your balance sheet. If you need a better fit, switch mid-term.”
When you evaluate a cyber insurance policy, don’t stop at the price tag. Look closely at:
- What’s actually covered
- Any exclusions hidden in the fine print
- The security controls you’re expected to have in place
“We’ve seen carriers deny claims because the business didn’t meet their MFA or data backup standards,” Cook adds. “It’s not just about having insurance, it’s about being ready to use it.”
Cyber Liability Insurance in 2025
At One Step Secure IT, we share insights like these to empower business leaders to make smart, confident decisions around cybersecurity and IT because protection starts with knowledge.
While we don’t offer cyber insurance ourselves, we help business meet the compliance requirements and we’ve seen the impact it can have. When paired with the right security measures, a well-chosen policy can be a game-changer in the aftermath of a breach.
In 2025, cyber liability insurance isn’t just about shifting risk, it’s about building resilience. With the right coverage and a trusted broker, you can reduce your exposure, strengthen your response, and protect the business you’ve worked hard to build.
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