Think cyber insurance is a panacea for your cybersecurity woes? Think again.

Cyber insurance was supposed to be a safety net — a way for organizations to mitigate financial risk when cyberattacks strike. But with S&P Global projecting a 15-20% rise in premiums in 2025 alone, it’s clear that cyber insurance has become a crutch.  

Too many businesses think they can deprioritize strong security practices in favor of a financial escape route.  

This needs to change. The existence of cyber insurance has created a culture of complacency. Companies weigh the cost of investing in cybersecurity against the ease of paying a ransom with insurance money. And too often, they choose the latter.

Cyber insurance enables bad decisions

Right now in a boardroom somewhere, a CFO is making a calculated decision: “We could invest millions in cybersecurity, but why bother when our cyber insurance policy will cover us?”  

That’s the reality of how many companies approach security today. Cyber insurance offers an “out,” making it easier to justify skimping on robust defenses.

This mentality creates a perverse incentive structure. Businesses know that if they get hit with ransomware, they can simply pay the ransom and move on. They don’t invest in modern security best practices because there’s no immediate financial urgency.

That is, until they get hit — and then, the costs go far beyond the ransom payment itself.  

A Zero Trust approach gets rid of this reactive mindset. It ensures that security is built into every layer of the organization so that ransomware can’t take hold.

The unseen costs of cyber insurance  

Organizations that rely on cyber insurance instead of strong security face long-term consequences. Here’s what they don’t factor into their cost-benefit analysis:

• Data trust erosion: When a company gets breached, it’s not just their money at risk. It’s their customers’ trust. Clients assume their data is protected. When that trust is violated, it’s hard to rebuild.

• Repeat attacks: Attackers target insured companies because they know the payout is almost guaranteed. If an organization pays once, it paints a target on its back for future attacks.

• Regulatory scrutiny: Governments worldwide are cracking down on cyber insurance-fueled ransom payments. Future regulations may remove the ability to pay ransoms altogether, making insurance-based strategies obsolete.

• Rising premiums: Cyber insurance costs are skyrocketing, and policies are becoming more restrictive. Companies that rely on insurance today may find themselves priced out of coverage tomorrow.

A Zero Trust security strategy reduces risk by eliminating unnecessary trust and limiting the attack surface.

Rather than reacting to breaches, organizations that follow Zero Trust principles take a proactive approach to securing their environments. This significantly weakens the impact ransomware and other cyber threats can have on your network.

The industry would be better off without cyber insurance

The hard truth is that cyber insurance has done more harm than good.

Without it, businesses would be forced to prioritize security, weighing the real risk of collapse against investing in protection — and most would choose security.

If ransomware payments were banned, companies would have no choice but to build resilience, adopt Zero Trust, and treat cybersecurity as essential, not optional.

Right now, companies treat cyber insurance like a fire escape: something they don’t think about until the building is burning.  

But cybersecurity isn’t a fire escape — it’s the sprinkler system, fireproof walls, fire doors, and smoke detectors that prevent a blaze in the first place.

The path forward: Zero Trust and accountability

To fix this broken system, organizations need to shift their mindset. Instead of relying on cyber insurance as a financial Band-Aid, they should:

• Eliminate the option to pay ransoms: If paying ransoms were illegal, companies would be forced to secure their data properly.

• Hold leadership accountable for cybersecurity investments: Security shouldn’t be a budget line item that gets cut for short-term financial gain.

• Build true cyber resilience with Zero Trust: This means implementing least-privilege access, segmentation, immutable backups, and real-time threat detection.

At the end of the day, money drives change. To fix cybersecurity, insecurity must be the costlier option. Eliminating ransom payments and cyber insurance as a crutch will force businesses to take security seriously.

Zero Trust is the answer — it removes implicit trust, enforces strict access, and ensures attackers hit a wall, not open doors.

Cyber insurance rewards bad behavior. The sooner we move past it and embrace Zero Trust, the safer we’ll be.