Protecting Your Business: Cyber Insurance, Fatigue, and Tailored Solutions

April 18, 2024
By Cornerstone Staff

Cyber insurance has become an essential form of protection in today’s digital landscape. With the rapid increase in cyberattacks and the evolving nature of cybersecurity threats, it is crucial for businesses to have comprehensive coverage that can mitigate the potential risks. In this article, we will explore the importance of cyber insurance, the risks of cyber fatigue, the limitations of low-cost policies, and the value of a tailored cyber insurance policy. Whether you are a small business owner or a corporate executive, understanding the significance of cyber insurance is essential for safeguarding your business.

From 2020 to 2022, U.S. businesses saw a 300% increase in cyberattacks¹.

The Rapid Growth of Cyber Insurance

Cyber insurance has come a long way since its inception in 1997. Initially, it was a little-known niche coverage, but it has now become widely recognized as a necessary form of protection. In 2021, cyber insurance premiums exceeded $10 billion, and they are expected to grow at a rate of 20% annually, reaching $23 billion by 2025². The rapid growth of the cyber insurance market is reflective of the increasing awareness of the risks associated with cyberattacks and the need for comprehensive coverage.

The Changing Landscape of Cyber Insurance

The cyber insurance market is evolving at a rapid pace. Policy terms and underwriting requirements are constantly changing to keep up with the dynamic nature of cyber threats. Unlike traditional forms of insurance, such as property coverage, cyber insurance is still relatively new, and insurers are continuously learning and adapting to the evolving landscape. As a result, there have been significant changes in premiums, coverage offerings, and underwriting practices in recent years.

The Risks of Cyber Fatigue

With the volatility and complexity of the cyber insurance market, many businesses may experience what is known as “cyber fatigue.” Cyber fatigue refers to the weariness, disinterest, or reluctance to fully understand and navigate the complicated cyber insurance marketplace. The underwriting process is rigorous and complex, with changing policy terms and premiums. Many clients may feel fatigued by increasing premiums and the constant need to improve their cybersecurity measures. This fatigue can lead to businesses opting for minimal coverage or choosing the least expensive policy, which may leave them vulnerable to devastating cyber risks.

The Costly Risks of Cyber Fatigue and Inadequate Coverage

The risk of simply “checking the box” for cyber coverage can be costly for the insured and the retail agent. A small accounting firm with less than 50 employees recently suffered a cyberattack that included malware and ransomware – very common attack elements. The accounting firm had cyber insurance in place to protect against the impact of such an attack…or so they thought. Before the malware was discovered, the firm’s leaders had reviewed their insurance coverages with their insurance agent. In an effort to reduce costs, the firm eliminated a standalone cyber policy in favor of a more affordable rider on the general liability policy. Unfortunately, the new policy did not cover this type of cyberattack because the malware was found to be present on the company’s network before they purchased the new coverage. The policy did not cover preexisting attacks. The new policy also only covered third-party damage suffered by those outside the company, like clients or vendors. In this instance, the attackers demanded ransom, which meant first-party damages for the accounting firm, which were excluded. In the end, the firm was forced to cover the costs of the attack out-of-pocket. Such an expense can be crippling for a small-to-medium-sized business. In fact, 60% of small companies go out of business within six months of suffering a cyberattack³.

60% of businesses say they would reconsider entering into an agreement with another business if that organization doesn’t have cyber insurance⁴.

The Need for Tailored Cyber Insurance Coverage

One of the key lessons to learn from the risks of inadequate coverage is that cyber insurance is not a one-size-fits-all solution. Low-cost policies or riders often provide limited coverage, mainly focusing on third-party damages from claims brought by clients. However, there are numerous other cyber risks that businesses need to consider. Malware, ransomware, and attacks originating from third-party vendors can have devastating consequences for a business’s network, data, and operations. To fully protect against these risks, businesses need standalone, full-coverage cyber insurance policies that offer protection against a wide range of third- and first-party cyber risks. These policies can cover expenses such as data restoration, lost business income, system failures, reputational harm, and more.

Understanding the Scope of Cyber Risk

Navigating the cyber insurance market and understanding the scope of cyber risk can be complex and time-consuming. However, it is crucial for businesses to undergo this process to fully assess their vulnerabilities and ensure adequate coverage. Cyber insurance underwriting involves evaluating an insured’s vulnerability to a cyberattack. Many businesses may not fully understand their own exposure to cyber risks. Premiums for cyber insurance can often reflect the insured’s lack of cybersecurity measures, such as multi-factor authentication, cybersecurity frameworks, zero-trust network architecture, and vendor risk management programs. By performing due diligence and understanding their cyber risk profile, businesses can take proactive steps to bolster their networks and reduce the chances of a cyberattack.

$4.45M Average Cost of a Data Breach in 2023⁵.

$5.13M Average Cost of a Breach involving Ransomware in 2023⁵.

Beyond Coverage: The Total Value of Cyber Insurance

Cyber insurance is not just about financial protection against cyberattacks; it also offers valuable services and support to minimize damages and prevent future attacks. A comprehensive cyber insurance policy may include:

  • network vulnerability scans
  • ongoing network notifications and updates
  • data retrieval support
  • ransomware negotiation services
  • business interruption support
  • software restoration and replacement

Insurers have a vested interest in minimizing risk and often work in partnership with clients to reduce the threat level. By investing in a full standalone cyber insurance policy, businesses can receive not only financial protection but also access to a range of resources and expertise to strengthen their cybersecurity defenses.

Partnering with a Trusted Cyber Insurance Provider

Overcoming cyber fatigue and navigating the complexities of the cyber insurance market can be made easier by partnering with a trusted cyber insurance provider. The expertise of the insurance provider can add significant value to the cyber insurance placement process by understanding the client’s risk profile, shopping the market to identify the best possible carriers, and thoroughly explaining coverage and benefits. The right provider will help businesses understand the nuances of different policies, offer benchmark data for their industry, and provide insights into the various cyber carriers in the market. By working with an experienced provider, businesses can make informed decisions and obtain the right cyber insurance coverage to meet their specific needs and goals.

The Bottom Line

In today’s digital landscape, cyber insurance is no longer an option; it is a necessity. The risks of cyberattacks and the potential financial losses associated with inadequate coverage are too significant to ignore. Businesses must prioritize cybersecurity and invest in comprehensive cyber insurance policies that offer protection against a wide range of cyber risks.

Cornerstone Can Help

When you partner with Cornerstone, we’ll work with you to understand your own cyber risk profile to navigate the evolving landscape and ensure the right coverage to safeguard your business’ operations and reputation. Don’t let cyber fatigue or inadequate coverage leave your business vulnerable to devastating cyber risks. Take the necessary steps today to protect your business with cyber insurance. Connect with us to get started.







1. Accounting Cybersecurity: Keeping Your Financial Data Secure, Multiview Corp., August 2, 2022.

2. Making Cyber Risk Insurable: Disrupting the Cyber Industry in 2023, Forbes, April 27, 2023. forbesfinancecouncil/2023/04/27/making-cyber-risk-insurable-disrupting-the-cyber-insurance-industry-in-2023/?sh=1a8ca5f658eb

3. 60 Percent of Small Companies Close Within 6 Months of Being Hacked, Cybercrime Magazine, January 2, 2019. https://

4. Cyber Insurance Premiums Are Up – And That’s Not The Only Industry Shakeup, Forbes, October 21, 2022. forbestechcouncil/2022/10/21/cyber-insurance-premiums-are-up-and-thats-not-the-only-industry-shakeup/?sh=769f79da2290

5. Cost of a Data Breach Report, IBM, 2023.


Cornerstone Staff

| Cornerstone
Free Yourself from the Burden of Licensing