The Most Frequent Cyber Insurance Claims: Key Threats Businesses Face 

In today’s age and time, cyber insurance is crucial for all businesses – especially because cyber incidents are constantly increasing in both severity and frequency. Companies are facing increasing financial and operational risks, starting from ransomware attacks to fraudulent fund transfers. Dig deep into the most frequent cyber insurance claims, their financial impact, and how the latest trends are shaping cyber threats.  

Insurance providers are witnessing an increase in cyber claims because of increased cyberattacks. The most common claims include ransomware, business email compromise, data breaches, system outages, and fraudulent fund transfers.  

Ransomware 

One of the most significant cyber threats victimizing both large enterprises and small businesses. The main strategy of the attackers is to encrypt sensitive data and, in turn, ask for a ransom payment for decryption keys. Another strategy for the hackers is to further threaten the victim by leaking their critical information.  

The harsh reality of these attacks is that costs can exceed millions in just one incident. This includes ransom payments, forensic investigations, business downtime, and regulatory fines.  

Some common trends in these attacks are that they are increasing in both size and frequency, with the norm of threatening combined with data encryption. The most common targets of these attacks are small and mid-sized businesses, due to weaker cybersecurity defense and strategy.  

Business Email Compromise & Social Engineering Fraud 

One of the most financially damaging cyber threats is where attackers grip human manipulation rather than technological exploitation, and that is how we define Business Email Compromise. Attackers mimic executives, vendors or even employees to extract funds or reveal sensitive information 

Some of the most common tactics used are phishing emails where the attackers impersonate various company roles, often paired with fake invoices that would trick employees into transferring money into their accounts. This is effortlessly done by the attackers by leveraging artificial intelligence (AI) to produce realistic imitations. Hackers have identified ways to bypass authentication techniques and, therefore, are easily able to infiltrate email accounts.  

Data Breaches 

As it is well known, data breaches expose critical customer data that can lead to compliance violations, lawsuits, and reputational damage for companies. And so, it continues to be one of the top causes behind cyber insurance claims as regulatory fines and legal liabilities increase.  

Data breaches are commonly caused by an internal error and is often accidentally leaked. However, it can also be a malicious act by one of the employees and intentionally leaked, causing trouble for the business owner. Another common cause is simply technical, where software vulnerabilities and cloud misconfigurations can cause hefty damage. Lastly, third-party vendor breaches that compromise supply chain security can play a role in the breach as well.  

The most common sectors that are victimized to this kind of breach are the healthcare, financial, and education sectors – as they are at a higher risk due to their large volumes of critical data. Unfortunately, these victims also face higher fines due to strict regulatory enforcement under laws like GDPR and CCPA, leading to larger costs after such a loss.  

System Outages & Business Interruption 

Cyberattacks aren’t just all about compromising data but can also put a halt to your operations and lead to severe business disruptions. System outages caused by cyber incidents can bring your operations to a standstill and, eventually, revenue losses.  

System outages are usually caused by distributed Denial of Service (DDoS) attacks that flood systems with traffic. Furthermore, IT misconfigurations can also unintentionally shut down systems with sensitive information. And lastly, some ransomware-related system lockouts prevent access to vital business operations.  

Hackers are vigorously targeting critical infrastructure and supply chains, only to intensify the impact of attacks. Because of such prolonged system downtimes, the financial sector has reported significant losses.  

Fraudulent Funds Transfer 

This is perhaps the most gruesome rising concern in the cyber insurance industry, mainly because the attackers exploit real-time payment systems and social engineering techniques to trick employees into transferring funds. For them, it’s quite simple. They send fake wire transfer requests that appear to be coming from executives. Then, they manipulate the payment instructions from all compromised vendor email accounts.  

Since these frauds occur in real-time payments, victims often are unable to detect the fraud and fall for it, as they are not properly trained enough to be able to identify fraudulent requests.  

The cybercrime landscape is growing rapidly, leading to a surge in cyber insurance claims. It is crucial for businesses to take proactive measures to strengthen their cybersecurity defenses, train employees to help them better understand such tactics, and implement robust security controls to reduce exposure to such risks.  

While Cyber Insurance can help combat financial losses, prevention should still be your number one priority. We hope this article helped you understand the common cyber risks and enables you to make informed decisions regarding security investments and insurance coverage in 2025 and beyond. Stay informed, stay safe! 

For expert advice, contact Shayne Bevilacqua at Professional Liability Insurance Group.  
Call or Text us at +1 (877) PLIG – 123, That’s (877) 754 – 4123.