In 2025, infrastructure vulnerabilities—particularly in legacy systems, operational technology (OT), and critical sectors—significantly influence cyber insurance costs. Insurers increasingly scrutinize an organization's risk posture during underwriting, where unpatched systems, outdated protocols, and poor IT/OT segmentation drive higher premiums, stricter terms, or even coverage denials.
While the global cyber insurance market has stabilized with premium rates declining overall (e.g., 5-7% decreases in recent quarters), high-risk profiles from vulnerable infrastructure face elevated costs or reduced insurability. The market is projected to reach $16-23 billion in premiums by year-end, fueled by rising breach costs averaging $4.75-5 million.
Key Ways Vulnerabilities Drive Up Costs
- Rigorous Underwriting and Risk Assessment: Insurers require detailed questionnaires and external scans to evaluate controls like patching, MFA, endpoint detection, and network segmentation. Legacy systems often fail these, as they lack support for modern tools or regular updates, leading to higher perceived risk and premiums. Organizations with exposed vulnerabilities (e.g., unpatched OT or legacy VPNs) are 3-4 times more likely to face incidents, prompting insurers to impose rate hikes or sub-limits.
- Increased Claim Frequency and Severity: Vulnerabilities in critical infrastructure amplify breach impacts, with longer containment times and higher losses. For instance, OT environments in industrial sectors see escalating premiums due to patching limitations, legacy equipment, and safety constraints that hinder updates. Ransomware claims, often exploiting these gaps, cost significantly more when involving data exfiltration—over double non-exfiltration incidents.
- Sector-Specific Impacts on Critical Infrastructure: Sectors like healthcare, manufacturing, utilities, and energy—reliant on legacy systems—face the toughest conditions. Healthcare saw a 90% surge in attack frequency in 2025, with losses 2-3 times higher than other industries due to aging devices and vendor risks. Industrial OT risks lead to coverage gaps, higher retentions, or refusals, as insurers differentiate IT from OT profiles.
- Supply Chain and Systemic Risks: Interconnected vulnerabilities, including third-party dependencies and unpatched supply chain software, contribute to systemic events (e.g., Change Healthcare breach). These raise insurer exposure, resulting in exclusions for infrastructure outages or higher costs for broad coverage. Costs from supply chain attacks are expected to hit $60 billion globally in 2025.
- Compliance and Control Requirements: Insurers mandate baseline controls (e.g., 24/7 SOC monitoring, immutable backups). Failure to meet these—common with legacy setups—triggers premium increases or ineligibility. Conversely, strong postures (e.g., modernized infrastructure) yield discounts and better terms.
Market Trends in 2025
Despite vulnerabilities pushing costs up for risky entities, the market remains competitive and buyer-friendly overall, with rates declining due to insurer capacity and improved controls among many policyholders. However, resurgence in ransomware and systemic events could reverse this, with forecasts of 15-20% increases in 2026. High-risk infrastructure profiles (e.g., unmodernized critical systems) buck the trend, facing sustained or rising premiums.
Conclusion
Infrastructure vulnerabilities, especially legacy and OT-related, are a primary driver of elevated cyber insurance costs in 2025 by increasing perceived and actual risk. Modernization—through patching, segmentation, and adopting tools like EDR/MFA—not only reduces breach likelihood but directly lowers premiums and improves insurability. With breach costs at record highs and threats evolving (e.g., AI-enabled exploits), prioritizing vulnerability management is essential for cost control and resilience. Organizations should conduct risk assessments early to negotiate favorable terms amid a stabilizing but vigilant market.