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AI is widening cyber coverage gaps as deepfake claims grow
Synthetic voice attacks at insurers jumped 475% in 2024, while cyber coverage has lagged behind losses from high profile third party outages like the July 2024 CrowdStrike event.
Cyber insurance premiums are falling, but coverage gaps are widening as AI changes how cyber losses happen, according to Insurance Business. Jencap broker Ed Chadwick, AVP and professional lines lead, said AI cyber liability risk is moving beyond traditional policy language as deepfake fraud and algorithmic risks reshape claims. Chadwick said claims are no longer limited to system failures and ransomware, with AI shifting losses toward more algorithmic risks. He added that deepfake crimes are becoming increasingly convincing, driving losses higher in both frequency and complexity.
The report points to rising synthetic voice attacks at insurance companies, citing Pindrop’s 2025 Voice Intelligence and Security Report that showed a 475% increase in 2024. Carriers have responded unevenly, and Chadwick said several reputable insurers now offer affirmative AI coverage that explicitly names AI related incidents as covered events rather than relying on legacy wording.
Chadwick also warned that soft rates do not necessarily mean better protection, since excess market capacity can push premiums down independently of policy scope. He highlighted a structural gap for cyber policies that are designed around breaches of the policyholder’s own systems, not third party provider failures, calling contingent business interruption one of the biggest issues in many risk management portfolios. The July 2024 CrowdStrike outage is cited as an example, with Fortune 500 companies losing $5.4 billion, while cyber insurance covered only 10 to 20% of that loss, according to Parametrix.