One of the questions people often ask is: What is the cost of protecting a business against cyber attacks? And this is the question: How much does cyber insurance cost? It gets into who needs cyber insurance – we’ve talked about that before. The big question is first party versus third party: Does it cover you or other businesses that might affect you or that you might affect? The claims have to do with hacking, ransomware, and other types of difficulties in getting your data from a computer.
Here is where it gets into the nuts and bolts: The average cyber insurance for a one-million-dollar policy is about $1500 a year. That’s what we’re seeing on our side of the business. It’s a little higher now if you get a million-dollar coverage – it might be $1600 to $1700 a year – but this is with a $10,000 deductible. If you’re a well-capitalized business and you can go up to a $20,000 deductible, you could be back closer to a thousand, which is what we recommend. Just having the insurance and the coverage will give you a lot of protection because that insurance company will put protection on your computers to help prevent a loss even before you get one. God forbid you do have one, they’ll step in and cover it.
We recommend going with the higher deductible if you’re well-capitalized just because it’ll put you in a better place. Your premium will be lower, plus it’ll disincentivize you from making a claim. Because if you make a claim for a small amount, you’re either going to be non-renewed more than likely, or your rates might go up down the road.