Cybersecurity insurance is a relatively new addition to the world of risk management, and many business owners are unsure of what it is and how much it costs. In this post, we’ll discuss what cybersecurity insurance is, why you might need it, and how much it typically costs. We’ll also give you a few tips on how to get the best deal on your policy. Let’s get started!
What Is Cybersecurity Insurance?
Cybersecurity insurance is designed to protect businesses from financial losses that can occur as a result of a cyberattack. It can provide coverage for things like data breaches, ransomware attacks, and stolen funds. This type of policy can give your company the financial cushion it needs to deal with expensive issues like these, as well as cover related legal fees and other costs.
This insurance also provides businesses with access to cyber risk management assistance, such as crisis planning and assistance from cybersecurity experts. These consultations help you prevent a cyber incident before it occurs, which is a much better form of risk mitigation.
These policies are more specialized than general liability insurance, so it’s important to find an insurer that offers targeted cyber coverage. You’ll also want to work with a broker who specializes in cyber insurance as they’re able to help you determine the exact type of policy you need based on your business size and sector.
For example, if you run a business that depends heavily on data, you’ll want to make sure that your policy includes coverage for the cost of restoring lost or damaged data.
What Are The Benefits of Having Cybersecurity Insurance?
While no one can guarantee that your business will never be the victim of a cyberattack, cybersecurity insurance can help mitigate the financial damages that may occur if you are targeted. It can also help demonstrate to customers and investors that you are taking steps to protect your business from potential threats.
How Much Does Cybersecurity Insurance Cost?
Cyber insurance costs will vary depending on the size and complexity of your business, as well as the level of coverage you will need. Generally, though, it is relatively affordable, with premiums starting at around $1,485 per year or $124 per month.
Typically, small businesses can expect to pay around $500 annually for a policy that covers third-party liability. Policies that include first-party coverage cost more, with prices starting at around $2,000 annually.
There are a number of factors that will affect the cost of your policy, including the following:
- The amount of coverage you need
- The type of business you operate
- The size of your company
- Your company’s risk profile
- The number of devices you have connected to the internet
In general, the more coverage you need and the larger your company, the more expensive your policy rates will be.
How Much Cybersecurity Coverage Should You Get?
Sometimes, higher coverage limits aren’t always best — you may end up with an astronomical cyber insurance cost that can only take away from your main business focus. That said, it’s important to get enough protection to safeguard your company in the event of a data breach.
When you’re shopping for cybersecurity insurance, remember that there are two types of coverage: first-party and third-party. First-party coverage reimburses you for damages to your own systems, while third-party coverage protects you from lawsuits filed against you as a result of a breach.
Who Should Buy Cybersecurity Insurance?
Generally, getting cyber insurance coverage is a must for any business. After all, data breach costs can rise exponentially if small business owners do not understand the potential cyber risks.
Keep in mind that there are different types of cyber insurance policies. Small businesses with fewer devices and less exposure to risk may only need a policy that covers third-party liability. However, if you have a larger company with more devices and a higher risk profile, you’ll likely need a policy that includes first-party coverage, which covers data breaches and cyberattacks to your own business.
Note that the price of cyber insurance will continue to rise as data breaches become more common. In fact, some experts predict that the cost of cyber insurance could reach $20,000 per year within the next five years. So if you’re not already insured, it’s important to get covered now before premiums skyrocket.
Ultimately, the decision to purchase cyber insurance is a personal one. But given the increasing frequency and severity of data breaches, it’s a risk that all businesses should seriously consider.
How To Apply For Cybersecurity Insurance
If you’re ready to protect yourself against cyber threats and want to start finding the right insurance agents to buy cyber insurance, follow the steps below to apply.
- Determine your needs. Make sure to figure out the cyber liability limit you need and figure out if you want first- and third-party cyber insurance for your business.
- Find a good agent. A good insurance agent will offer the best protection at the most competitive price. They will also help you find an insurance carrier that suits your business best.
- Get multiple quotes. Once you find an agent that you’re comfortable working with, get quotes from multiple carriers to find the best cyber insurance policy for your business.
- Make the purchase. This is where your agent will help you sign all of the relevant paperwork and submit any necessary applications.
Tips On How To Get Cheap Cybersecurity Insurance
If you’re not careful, the cost of cybersecurity policies can rise quickly. Knowing how to find cheap cybersecurity insurance is a must for business owners to protect their bottom line while still remaining safe. Below are a few tips to get cheap cybersecurity insurance:
- Shop around. As is the case with most types of insurance, getting multiple quotes is the best way to find a policy that fits your needs and budget.
- Bundle policies. Sometimes businesses can get discounts by bundling their cybersecurity insurance with other types of coverage.
- Look for group rates. If you’re part of a trade or professional organization, ask if they offer group rates for cybersecurity insurance.
- Get a quote. To get an idea of how much your policy will cost, you can get a free quote from many websites online.
In A Nutshell
Cybersecurity insurance is becoming more and more important as businesses face increasing threats from cybercrime. The good news is that it’s becoming more affordable, and many options are available. To find the best deal, get quotes from several different insurers and compare policies.
If you want to learn more about cybersecurity and how it can affect your business, take a look at Security Forward’s article on why it’s important to learn about cybersecurity.
Desiree Macy is the Editorial Director of Security Forward which is frequented by security executives, corporate security officers, and private protection professionals each month. Desiree’s interests revolves around cyber-security, and business continuity.