Data breaches can bankrupt small to medium-sized businesses. And every time it happens, those business owners wish they had the foresight to have gotten cyber security liability insurance back when it would have been useful. But, at the time they were too concerned with cyber insurance costs to actually pull the trigger, so to speak.
Well, perhaps if they knew that the average cost of a data breach in the US this year (2022) was $4.35 million dollars, they may have opted to call the insurance company a lot sooner.
In this blog, we’re going to explain exactly why cyber liability coverage is important to have as an owner of a SMB. We’ll also explain the various types of coverage available on the market, and a breakdown of the average cyber liability insurance costs you’re likely to be quoted (and what factors can influence your premium).
What Exactly is Cyber Security Insurance, and What Types Are There?
Cyber security insurance is a type of business insurance coverage that protects organizations from the costs associated with cyber attacks, data breaches, and other cyber incidents.
There are three main types of cyber liability coverage:
- First Party Coverage
- Third Party Coverage
- And Professional Liability Coverage
First Party Cyber Insurance covers direct financial losses sustained by your business due to cyber incidents such as cyber crime, cyber liability or cyber extortion.
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Third Party Cyber Insurance covers financial losses sustained by your customers as a result of cyber incidents, including data breaches (stealing sensitive data like social security numbers, credit card information, etc.), cyber extortion, and cyber defamation.
Finally, Professional Liability Cyber Insurance protects businesses from legal costs incurred due to claims of negligence related to cyber incidents.
How Much Does Cyber Security Insurance Cost? A Breakdown of the Facts and Figures
Now, let’s answer the question of “how much does cyber liability insurance cost?”
Cyber insurance costs can vary greatly depending on a number of factors, including:
- The size and type of business you have
- The types of cyber incidents covered by your policy (e.g., cyber crime, cyber liability, cyber extortion)
- And the amount of coverage that you opt for
That being said, according to recent reports from industry experts, US businesses can expect to pay an average premium between $500-$5,000 per year for cyber security insurance.
However, this is just an average – some businesses will pay a higher insurance premium for coverage if they are perceived as being at high risk of cyber attacks or data breaches.
Other factors that may influence your cyber insurance costs include:
- Your location (the rate in urban areas tends to be significantly higher than rural areas)
- The cyber security posture of your business
- Any previous cyber-related incidents (such as ransomware attacks)
- And a previous cyber insurance claims history
How Much Does Cyber Insurance Cost? More Factors That Influence the Price
In addition to the factors mentioned above, cyber insurance costs (and the subsequent insurance quote you receive) may also be influenced by:
- The cyber security solutions your business employs, including firewalls, IT support, and software patches.
- Your cyber risk management practices, such as how often you conduct cyber risk assessments or train employees on cyber safety best practices.
- Whether your business has a cyber incident response plan in place in case of a cyber attack.
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So if you’re a small business owner who is looking for cyber security liability insurance, it’s crucial to work with an experienced broker who can help you navigate the market and find coverage that meets your needs at an affordable price.
With the right coverage in place, you’ll be better prepared to handle cyber incidents and minimize any financial losses in the process.
Finding Cyber Insurance Costs Within Your Budget with the Help of CP Cyber
At CP Cyber, we’re cyber security specialists who have extensive experience working with SMBs to help them meet the requirements outlined by their cyber security liability coverage in order to increase the likelihood of a payout and often reduce their premiums.
Costs are going up, and it’s harder to get cybersecurity insurance for a good price, but CP Cyber can help you optimize your network security for better quotes.
Contact us today to help reduce your cyber security insurance premiums through cybersecurity assessments and/or SOC services.