October 15, 2020
The cost of cyber insurance is determined by a variety of factors including coverage limits, the size of your company, industry-specific risk, history of claims, and existing security measures. In 2019, the average cost of cyber insurance in the United States (the country that is most often targeted with cyber attacks) was about $1,500 per year or $125 per month. And in a recent study that reviewed quote estimates for companies that brought in $1 million annually and required liability limits of the same amount, premiums ranged from $544 to over $2,000.
The short answer on cost for cyber insurance is that your cost will be customized to your business’ needs. To find the right coverage for your business, you need to first assess your current risk.
In this article, we’ll break down the factors that determine cyber security insurance cost, how you can find the right price, and how you can make sure your policy is right for you.
This article is part of a larger series about cyber insurance:
Cyber Insurance Cost
While the average cost of a cyber insurance policy in the United States is $1,501 per year, each comprehensive cyber insurance policy will vary based on the following factors:
Company Size The larger the company, the more employees have access to sensitive data and more protection is required. The cost of disruption to the business is higher, the number of vulnerabilities is generally larger, and there is likely more sensitive information that can be stolen or held for ransom.
Industry Risk Some industries may be deemed more or less risky based on the type of work they do (and their categorization by the insurer). Organizations that collect and store sensitive data (often financial, healthcare, IT, or government organizations) are likely at a higher risk of cyber attack.
Existing Security Measures A 2018 report found that 95% of breaches were completely preventable. Assessing the measures that a business is already taking to prevent cyber attacks can lower the price of cyber insurance. Applications for cyber insurance can often include questions about security training practices, disaster recovery and business continuity plans, data backup strategies, data encryption, etc.
Coverage Needs and Limits The limits of coverage, deductibles, premiums, and losses a business is willing to account for all affect the total cost of cyber insurance. Policies may differ by insurance provider and even by policy from the same provider—for example, coverage for cyber-related financial fraud or IP infringement. More breadth of coverage will increase the policy’s price. Of course, larger limits or lower policy deductibles will likely cost more. It’s important to carefully assess your coverage needs as you select your cyber insurance terms. And keep in mind that some companies may have contracts with partners that require a specific level of coverage.
Claims History Like other forms of insurance, if you have a history of incidents you may pay a higher price for insurance for a few years after the incident.
Sensitive Data Records The amount or types of data records your business processes or stores are important factors in a cyber insurance policy quote. Part of a comprehensive cyber insurance policy is covering against the breach of sensitive data such as credit card, personal, or healthcare information. If your business processes or stores a large amount of such data, you will likely pay more for your cyber insurance policy.
How to Find the Right Cyber Insurance Policy Price
In order to find the right price for your cyber insurance policy, it’s important that you get your cyber security in order first. It’s a critical part of managing your cyber risk. For more best practices on cyber security, read here. Your insurance provider should also be invested in helping you avoid risk and may provide products, services or information to help.
How to Find a Cyber Insurance Policy Quote
Most providers offer a quote-based system that can be accessed online or through a broker. To get a better understanding of your current risk and the amount of coverage you may need, get started with a three-question assessment quiz.
To learn more about cyber insurance, check out these previous articles:
What is Cyber Risk? What is Cyber Insurance?
Written by: [Jeff Hendrickss]