Cyberattacks are not a matter of “if” but “when.” Hackers are constantly finding new ways to steal information, shut down systems, and demand money from businesses. A single cyberattack can cost a company thousands or even millions of dollars. It can also damage its reputation and make customers lose trust. That’s why cyber liability insurance is something all businesses should consider.
Because of the rising risk, many business owners ask, “How much does cyber liability insurance cost?” The answer depends on several things. As cyber threats become more advanced, insurance costs are likely to rise. However, businesses with strong security measures may still get affordable policies.
Ignoring cyber insurance can be a risky and expensive mistake. Instead, learn about how it works, what affects the price, and how to get the best insurance for your business.
What is Cyber Liability Insurance?
Cyber liability insurance is a type of business insurance that helps businesses recover from cyberattacks. If your company is hacked, this insurance can help cover financial losses, legal costs, and the cost of notifying customers. As laws around data protection become stricter, having this coverage can also help businesses stay compliant.
Types of Cyber Liability Insurance
There are two main types of cyber liability insurance:
- First-party coverage: This helps businesses handle a cyberattack that directly affects them. It can cover costs like restoring data, informing customers, and lost income due to business interruptions.
- Third-party coverage: This protects businesses if customers, vendors, or regulators file lawsuits due to a data breach.
What Does Cyber Liability Insurance Cover?
Most policies cover the following risks:
- Data breaches – Paying for customer notifications, credit monitoring, and fines.
- Ransomware attacks – Covering ransom payments, recovery efforts, and lost income.
- Legal fees – Paying for lawsuits from customers or regulators.
- Business interruptions – Compensating for lost revenue due to a cyber incident.
Factors That Affect Cyber Liability Insurance Costs
The cost of cyber liability insurance depends on several factors, including:
Business Size and Industry
Larger industries that store sensitive data, like the medical industry, usually pay more for coverage. The more valuable the data, the higher the risk, which means higher insurance costs.
Coverage Limits and Deductibles
Higher coverage limits offer better protection, but they also increase premiums. Businesses must decide how much risk they can handle and choose their deductible accordingly.
Cybersecurity Measures
Insurance providers look at a company’s security practices before setting rates. Businesses that use tools like multi-factor authentication, encryption, and network monitoring may qualify for lower premiums.
Claims History
Companies that have filed cyber insurance claims in the past are seen as higher risk, so they will have higher premiums. Businesses with no claims and strong cybersecurity practices usually get better pricing.
How Much Does Cyber Liability Insurance Cost?
The cost of cyber liability insurance varies widely. Small businesses can expect to pay between $500 and $5,000 per year, while large corporations may pay over $50,000 annually.
Industries with the Highest Premiums
- Healthcare – High costs due to strict data protection laws and valuable patient records.
- Finance – Banks and investment firms face constant threats from cybercriminals.
- Retail & E-commerce – Large amounts of customer data make these businesses prime targets.
Monthly vs. Annual Payments
Some insurers allow businesses to pay monthly, which can help with budgeting. However, paying annually is often cheaper because it avoids extra fees.
Standalone Policies vs. Endorsements
Some businesses add cyber coverage to their existing general liability insurance. That being said, standalone policies offer more protection and higher coverage limits.
How to Lower Cyber Liability Insurance Costs
There are several ways to reduce cyber insurance premiums, including:
Strengthening Cybersecurity
Businesses that regularly update software, monitor networks, and use encryption can lower their risk. Insurers may offer discounts to companies with strong security protocols.
Employee Training
Many cyberattacks happen due to human error. Teaching employees how to recognize phishing emails, create strong passwords, and handle sensitive data safely can lower the chances of a security breach.
Choosing the Right Coverage
Not all businesses need the same level of protection. Working with an insurance expert can help companies avoid paying for unnecessary coverage.
How to Get Cyber Liability Insurance
If you’re ready to protect your business, follow these steps:
- Assess Your Risks – Identify your biggest cybersecurity threats.
- Compare Providers – Get quotes from multiple insurance companies.
- Consult an Expert – Work with a specialist to customize your policy.
Trust Dickey Insurance Solutions With Your Insurance Needs
Cyberattacks are becoming more frequent and costly. Cyber liability insurance is a smart investment that protects businesses from financial and legal consequences. By understanding what affects the cost, improving cybersecurity, and choosing the right coverage, businesses can stay safe in an increasingly digital world. Our team at Dickey Insurance Solutions can set you up with the right business insurance for your company.
Are you looking to protect your business? Reach out to us! We are here to help you with all your insurance needs.
