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As I write this, global leaders of at least 30 countries are participating in a two-day summit to address the global ransomware issue.
Over the past several years, these cyber attacks have increased significantly, crippling many businesses and their consumers. Last year, ransomware attacks caused an estimated $74 billion in damages, according to a study by the cybersecurity firm Emsisoft.
Remember the Colonial Pipeline shutdown that caused gas shortages on the east coast? The meat processing plant shutdown that impacted the food supply chain? The leak of sensitive information from the Washington D.C. Police Department?
All causes of cyber attacks in 2021.
And keep in mind: those are only instances of large companies that made the news. Small businesses all around the country, including Massachusetts, are being targeted as well -- you just don’t hear about it often.
And cyber attacks can be extremely costly and detrimental, often putting companies out of business. So cyber insurance can really be a smart investment for your business.
But, if you’re considering buying cyber insurance, I’m sure the cost is a factor of your decision.
That’s what we’re here to help you with. At Berry Insurance, we’ve issued several cyber policies for businesses of all types in Massachusetts and beyond. So we’re pretty familiar with what goes into determining the cost of a policy in general.
In this article, we’ll give you an estimate of what cyber insurance can cost, get into the factors that influence it, and give some real examples of insurance premiums for Massachusetts business owners.
MA cyber insurance cost:
Without knowing any details about your Massachusetts business, giving you an estimate on cyber insurance isn’t really realistic.The cost can range significantly -- and this is especially the case with cyber insurance.
But we’ll start by giving you a vague range of what you might expect.
Depending on several factors, you can generally expect a cyber insurance policy to fall somewhere between $500 to $100,000 per year or $41 to $8,333 per month.
Factors that influence cyber insurance cost:
We know the range we gave you was a bit broad. So let’s get into the meat of what factors will actually affect your cyber insurance cost.
Company size:
The bigger the company, the greater the chances of having an insurance claim. And cyber insurance is no exception.
The bigger your company and the more employees you have, the more opportunities you have to be exposed to a cyber attack.
Therefore, larger companies will be priced higher for cyber insurance.
Number of clients:
Similar to company size, the number of clients your company has will increase the risk of a cyber attack.
More clients also means more opportunity for them to sue you if you experience a data breach that compromises their data or personal information.
So the number of clients your business has also plays a role in determining your cyber insurance premium.
Revenue:
You know the saying more money, more problems? Well it applies to your business.
The more revenue your company has, the more vulnerable it is to cyber attacks. After all, the more you are worth, the more desirable you are to cyber attackers because their potential award is greater.
So because revenue plays a role in your risk, it also plays a role in your insurance cost.
Industry:
Believe it or not, the industry you do business in will also influence the cost of your cyber insurance.
The job duties you do and the type of data you store will dictate how vulnerable you are to cyber attacks, and how severe the damage from the attacks can be.
Therefore certain industries will be priced higher than others.
Risk management controls:
When cyber insurance carriers quote you, they will analyze the strategies you use to reduce the risk of cyber attacks.
If you don’t have good cyber
Coverage limits:
Each type of insurance has limits. These amounts are the total amount the insurance carrier would pay out if you were to have a claim.
When purchasing cyber insurance, you can buy as little as $100,000, and as much as $5 million.
How much you choose to buy will depend on how high you perceive your risk, your budget, and any requirements from business partners.
The higher the limits you choose, the higher your premium will be.
Deductible:
Another factor that influences the price of cyber insurance is your deductible. A deductible is the amount you would have to pay out before an insurance carrier paid you any claim money. And usually you have a few deductible options for you to choose from.
With cyber insurance, you can generally choose between deductibles ranging from $1,000 to $10,000.
The higher your deductible, the lower your premium will be.
MA cyber insurance premium examples:
You know the factors that influence price, but you probably still don’t have a clear idea of what exactly that means for your business.
So to help give you some more insight, we’ll give you some specific examples of some of the cyber insurance policies we’ve issued recently.
- An HVAC contractor with $200,000 in coverage limits, and a $5,000 deductible: $134 per year
- A charter school with $100,000 in coverage limits and a $10,000 deductible: $148 per year
- An application service provider with $1,000,000 in coverage limits and a $10,000 deductible: $3,597 per year
- A fish processing company with $2,000,000 in coverage limits and an 10,000 deductible: $6,630
Ensure the right price with a reputable independent agent
We understand you are concerned about the cost of cyber insurance.
Believe it or not, we see a lot of companies forego it to avoid the extra cost. But we wouldn’t recommend that in most situations. We almost always recommend cyber insurance because we are increasingly seeing more businesses fall victim to cyber attacks and we know how detrimental they can actually be.
Still hesitant about if cyber insurance is a good fit for your business? For some examples of when and why you might need cyber insurance, check out this article: Common Cyber Insurance Claims that Could Happen to Your Business.
