How Ransomware Threatens Tech and MedTech Businesses

As technology transforms industries at a rapid rate, companies in the tech and medtech sectors face an especially challenging threat landscape. The technology advancements that drive these companies can also make them vulnerable to a broad array of risks – including losses arising from cyberattacks. A cyber event can cause operational disruption, reputational damage and financial loss.

Among the most urgent and damaging threats to tech and medtech companies is ransomware, a form of cyber extortion that has quickly grown into a global menace. The IT security company Sophos, which recently surveyed 5,000 IT professionals from 14 countries about cyber threats, found that the impact of a ransomware attack has increased significantly over the past year. Specifically, the average size of a ransom payment increased by five times – and average recovery costs were 50% higher.

No organisation is immune from this exposure, but the risks to tech and medtech companies are especially treacherous. These firms are appealing targets for cybercrime because of the highly valuable intellectual property and consumer data they possess. The impacts of an attack can be far-reaching, harming both customers and the wider tech industry.

“As global risks evolve, it’s crucial for these companies to partner with an insurer who has deep experience in their industry and understands the challenges they face,” said Craig Mounser, practice leader for Med Tech & Life Science at Travelers Europe. “When brokers see the scope and impact of ransomware risk in this sector, they can help their clients prevent these attacks and recover from them quickly if they occur.”

Why tech and medtech are prime ransomware targets

Technology and medtech companies are inherently attractive to cybercriminals. These businesses often house vast troves of critical data, from proprietary software and research data to personally identifiable information (PII) and confidential patient records. Their reliance on interconnected systems and cloud platforms makes them particularly vulnerable to attack.

Further, these firms’ intellectual property (IP) – including clinical research data, medical device blueprints and trial results – is highly valuable. Any disruption not only threatens business operations but could also delay critical treatments or medical innovations. This risk is magnified by the sector’s heavy regulatory burden, where non-compliance following a breach can result in steep penalties and reputational damage.

Brokers play a critical role in helping clients protect their IP and the infrastructure that supports it. By partnering with an insurer, they can help clients assess their vulnerabilities and secure insurance tailored to their needs.

Business interruption and ransomware impact

When a ransomware attack occurs, the immediate consequence is often system lockdown. In the tech and medtech industries, even short periods of downtime can lead to lost revenue, delayed projects, patient harm and reputational fallout. The business interruption impact of an attack can be profound.

Take, for example, a medtech company producing diagnostic devices. A ransomware event that shuts down production lines or compromises patient data not only halts income but may trigger expensive liability claims, product recalls or contract breaches. Similarly, a software provider hit with an attack may see its clients lose trust, resulting in long-term revenue loss and brand erosion.

The financial impact of ransomware is multifaceted. Beyond the ransom payment itself, businesses often face legal fees, regulatory fines, forensic investigations, crisis communication costs and, crucially, lost opportunity. Insurance that includes incident response as well as business continuity and recovery support can help businesses manage these impacts.

Key cyber risks brokers should flag

Ransomware gangs now operate like businesses themselves. Many offer “ransomware-as-a-service,” using double extortion tactics (encrypting files and threatening to leak them), and targeting backups to prevent recovery.

Brokers can help manage these threats by proactively identifying key cyber exposure points and communicating them to clients. Common attack vectors include phishing emails, third-party software vulnerabilities, unsecured Internet-of-things devices and outdated legacy systems. The most effective ransomware campaigns often begin with social engineering tactics that exploit human error.

Key risk indicators include:

• Unpatched software or unsupported operating systems
• Inadequate endpoint protection and monitoring
• Poor employee cyber hygiene
• Lack of incident response planning

A ransomware risk assessment can help businesses understand their vulnerabilities and prioritise actions to reduce exposure.

How cyber insurance from Travelers can help

Travelers CyberRisk Tech insurance provides robust and scalable protection tailored to the needs of businesses across the tech and medtech spectrum. CyberRisk Tech includes insurance for breach response, cybercrime and business loss. These first-party protection options help cover the costs of forensic investigations, litigation, crisis management, business interruption and cyber extortion.

Travelers CyberRisk Tech insurance goes beyond traditional insurance by offering end-to-end support – not only before and after a breach, but always:

Pre-breach support

• Endpoint Detection and Response (EDR) solution via SentinelOne – provided for 30 days at no additional cost
• Cyber resilience readiness assessment to help businesses evaluate and improve their security position
• One hour of expert coaching to help businesses interpret assessment results and plan preventative actions
• Access to cybersecurity risk management insights

Post-breach support

• Betterment cover for IT system upgrades post-breach
• Access to breach coach partner
• Access to pre-approved experts in areas including forensic investigation, forensic accounting, credit monitoring, crisis communication, and distributed denial of service attack response

Always

• 24/7 access to a dedicated incident response team, including IT forensics and reputational specialists
• Cyber awareness training modules exclusively for Travelers policyholders
• Ongoing risk management advice tailored to client’s industry and risk profile

Building cyber resilience for tech and medtech firms

Ransomware is no longer a hypothetical risk – it's an urgent reality for tech and medtech businesses.

“It can be stressful to run a tech or medtech business knowing it’s a ransomware target,” said Mounser. “By partnering with an insurer that provides industry-specific insight and holistic support, brokers can empower their clients to build resilience against today’s most pressing cyber threats.”

Travelers CyberRisk Tech provides more than insurance protection against these threats. It also gives businesses confidence – that they can withstand and recover from even the most disruptive cyber events. For more details on how Travelers CyberRisk Tech solutions can support your tech clients, visit our tech and cyber pages.

This article is provided for general informational purposes only. It does not, and it is not intended to, provide legal, technical or other professional advice, nor does it amend, or otherwise affect, the provisions or coverages of any insurance policy issued by Travelers. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy provisions, and any applicable law.