Cyber insurance guide
Ransomware and cyber extortion coverage
Cyber extortion coverage responds when criminals encrypt or steal your data and demand payment.
What extortion coverage can pay
- Expert ransomware negotiators and incident response firms
- Extortion payments where lawful and approved in advance by the insurer
- Data restoration and system rebuilding
- Business interruption while systems are down, under the business interruption section
- Notification costs if data was stolen
The reported numbers
The FBI Internet Crime Complaint Center received 3,156 ransomware complaints in 2024, and 86,415 extortion complaints of all kinds. Reported losses in IC3 data reflect only what victims report and usually exclude downtime and recovery costs, so they understate the real impact. Source: IC3 2024 Internet Crime Report.
Legal limits on payments
Payments to sanctioned people or groups can violate U.S. sanctions law. The U.S. Treasury's Office of Foreign Assets Control has warned that facilitating such payments carries risk. That is one reason insurers require prior consent and use specialist negotiators who screen threat actors.
Controls that matter most
Insurers concentrate their ransomware questions on a short list: multi-factor authentication on email and remote access, endpoint detection and response, tested offline backups, privileged account controls, and prompt patching. See security controls insurers look for.
Frequently asked questions
Does cyber insurance pay ransoms?
Many policies cover extortion payments where lawful and with the insurer's prior consent, along with negotiation and response costs. Some policies sublimit or coinsure ransomware losses.
What does the insurer need before covering ransomware?
Underwriters commonly ask about multi-factor authentication, endpoint detection and response, offline or immutable backups, and patching.
How common is ransomware?
The FBI's IC3 received 3,156 ransomware complaints in 2024. Many incidents are never reported, so the true number is higher.
More coverage and guides
- First-party cyber coverage
- Third-party cyber liability
- Ransomware and cyber extortion coverage
- Social engineering and funds transfer fraud
- Cyber business interruption
- Regulatory defense and PCI coverage
- Data breach notification laws by state
- Security controls cyber insurers look for
- Cyber insurance application checklist
- What affects cyber insurance cost
- Building a cyber incident response plan
Last updated October 15, 2026 · How we research