How Much Does Cyber Insurance Cost?

The price of cyber insurance isn’t universally uniform. It’s influenced by a myriad of factors, one of them being the size of the company. Larger companies, due to their greater risk exposure, face higher premiums. Businesses with higher annual revenues may pay more for coverage as they often become the targets of cybercriminals.

The industry a business belongs to also impacts the cost of cyber insurance. High-risk industries like healthcare and finance pay more due to the large volumes of sensitive data they manage. Conversely, the overall potential exposure risk for cyber insurance needs is determined by a company’s online presence and its hardware and software vulnerabilities, as identified in a comprehensive cyber risk assessment.

Services Offered and Protection Needs

The cost of cyber insurance is influenced by several factors, including:

The services provided by a business

The required protection level

The type of data stored

The industry the business operates in

For example, businesses that store high-risk data, such as hospitals, require more robust protection measures for their cyber liability insurance. As a result of the sensitive nature of the data handled, this heightened protection could potentially raise the cost.

Companies dealing with client personally identifiable information (PII) may incur additional costs for policies that cover client credit monitoring or identity protection services. As encryption is often a requirement for coverage by cyber insurers, this significantly bolsters device data protection and could result in reduced premiums.

Employee Access to Sensitive Data

Another determinant of insurance costs is the number of employees who have access to sensitive data. The more employees that have access, the higher the perceived risk by insurers, leading to increased premiums. Therefore, by restricting data access solely to necessary personnel, businesses can lower insurance costs and the overall risk of data breaches.

Furthermore, implementing cybersecurity awareness training for staff not only makes employees more vigilant but also favorably adjusts the risk profile assessed by cyber liability insurance providers. This can lead to a reduction in the overall insurance cost.

Claims History and Its Impact

In terms of cyber insurance premiums, a company’s history can provide an insight into its future. A history of cyber insurance claims on a cyber liability insurance policy typically leads to increased premium costs for future coverage.

On the bright side, a reduction in claims can stabilize or even decrease premium costs. However, in a volatile threat landscape, this reduction may be short-lived. Therefore, to manage their cyber insurance costs, it’s vital for businesses to handle claims effectively and prevent incidents.