As businesses increasingly rely on digital technologies, the risk of a cyber attack or data breach is ever-present. Cybersecurity insurance is a form of insurance that provides financial protection to organizations in the event of such incidents, making it a critical tool for managing cyber risks.
Cyber insurance, also referred to as cyber liability insurance, can help cover the costs associated with responding to and recovering from a cyber attack or data breach. These expenses can include lost revenue, legal fees, notification costs, reputation damage, and recovery costs.
If your business handles sensitive or personal information, the risks and costs associated with a cyber attack or data breach are even greater. This is especially true in light of data privacy regulations that have emerged in recent years.
However, the cyber insurance market can be unpredictable. High-profile cyber attacks have led to increased premiums and more stringent requirements from insurers. As a result, finding the best cyber insurance plan to meet your business’s specific needs can be challenging.
Top Cyber Insurance Companies List
There are many cyber insurance providers to choose from, but these five stand out in our analysis of the market.
- AmTrust Financial: Best Overall
- Chubb: Best for e-Commerce/Retail Businesses
- AIG: Best for Financial Institutions
- Beazley: Best for Healthcare Providers
- Hiscox: Best for Small Businesses
AmTrust Cyber Insurance is designed to protect individuals and businesses from the financial and reputational losses associated with cyber attacks, data breaches, and other online threats. AmTrust has policies that cover a range of expenses associated with cyber incidents, including legal fees, public relations costs, forensic investigations, credit monitoring services, and even ransom payments. In addition, these policies may also provide coverage for business interruption losses and cyber extortion. That coverage can come at a cost, however, as AmTrust can be pricier than other insurers.
- Comprehensive coverage for a range of cyber risks caused by cyber incidents
- Customizable policies so businesses can tailor their policies to meet their specific needs
- Risk mitigation on financial risks associated with cyber incidents to give companies some peace of mind while running their business
- Cybersecurity experts to help your business in assessing unique cyber risks and developing a comprehensive risk management strategy tailored to a business’s specific needs
- Too expensive for small and mid-sized businesses (SMBs) with limited budgets
- Coverage limitations can impact coverage in certain situations. As with any insurance policy, there may be certain limitations and exclusions that are dependent on the level of coverage you choose to purchase.
- Deductibles may pose a challenge for businesses to cover expenses related to a cyber incident.
- Claim processing can be complex, especially for businesses without extensive experience dealing with insurance claims.
Pricing: To get a cyber insurance policy quote from AmTrust, visit amtrustfinancial.com/get-a-quote.
Chubb Cyber Products
Best for e-Commerce and Retail Businesses
Chubb Cyber Products offers a range of cybersecurity policies you can choose from to meet your business’s needs. These include policies for SMBs as well as larger corporations. Policies can provide coverage for a range of cyber risks and threats and can be customized based on the level of risk and coverage your business desires. In addition to standard insurance policies, Chubb also offers specialized policies such as Cyber Enterprise Risk Management, which combines cyber insurance with risk consulting services to help you manage overall cyber risk. Innovative offerings, but prices can be higher than others.
- Comprehensive coverage that covers various types of cyber risks and threats
- Customizable policies can be tailored to meet your business’ specific needs and adjusted based on the needs of your business
- Risk management services help you manage and mitigate your business’s overall cyber risk, including incident response services
- Global coverage allows businesses with overseas branches to operate while still being covered by the same policy from the main headquarters
- Expensive policies price the company out of ranges for many small to medium-sized businesses. Although Chubb offers some of the most expansive coverage, the company is not looking into offering cheaper versions of their policies.
- Online assistance is not available so can’t get an instant chat with a company representative to get a preliminary quote for a policy.
Pricing: To get a cyber insurance policy quote from Chubb, you can request a quote or find an agent.
Best for FInancial Institutions
AIG is a global insurance company that offers cyber insurance particularly well suited for financial institutions, which face above-average risk because of their assets. AIG’s cyber insurance policies include coverage for first-party losses, such as business interruption and data restoration costs, as well as third-party liabilities, including fines and legal expenses.
- Strong financial stability so policyholders can be confident that AIG will be able to pay out claims if necessary
- Incident response services includes forensic investigation, legal support, public relations, and credit monitoring
- Expert claims team helps financial institutions and other clients navigate the claims process in event of a cyber attack so they can recover quickly
- CyberMatics is AIG’s program to help customers prioritize security improvements
- High premiums can be too much for smaller financial institutions and SMBs, making it difficult for some potential customers to justify the cost of coverage
- Complex policies can be difficult to understand and navigate, especially if you are not familiar with cyber insurance
- Limited customer service is the most common complaint of some customers, who say it is difficult for them to get in touch with AIG representatives when it comes to filing a claim or navigating their policy
Pricing: To get a cyber insurance policy quote from AIG, you can download an application on its cyber insurance page or find a broker.
Best for Healthcare Providers
Beazley is a top provider of cyber insurance, particularly for healthcare providers in the U.S. Their cyber insurance policies are specially designed to address the unique risks faced by healthcare organizations, including Health Insurance Portability and Accountability Act (HIPAA) and Health Information Technology for Economic and Clinical Health (HITECH) violations, cyber extortions and data breaches.
- Regulatory compliance assistance helps healthcare providers comply with HIPAA and HITECH as well as help with fines and other penalties in the event of data breach
- Reputable and financially stable, which gives policyholders some added peace of mind
- Risk management services help healthcare providers and others identify and manage their cyber risks. This includes network security assessments, training programs, and other resources to help institutions prevent cyber attacks from happening.
- Limited availability in some countries and states because of regulations and laws regarding data protection and privacy
Pricing: To get a cyber insurance policy quote from Beazley, visit beazley.com/en-us/speak-underwriter.
Best for Freelancers and Small and Medium-Sized Businesses
Hiscox is an insurance and investment company that provides a diverse range of insurance products, including comprehensive cyber insurance coverage. Designed to meet the unique needs of freelancers and SMBs, Hiscox’s cyber insurance policies offer a wide range of premiums and coverage options tailored specifically for this market segment.
- Customizable coverage makes it easier for SMBs to tailor their policy according to their business needs. This includes the coverage costs of notifying customers and regulatory authorities, restoring data, and repairing damage to computer systems. These policies can also cover the costs of business interruption and reputational damage. In addition, Hiscox offers discounts on its products, making it easier for SMBs to get the most out of their policy.
- Holistic coverage protects SMBs and others against both the direct costs of a cyber attack (such as loss of income or business interruption) and the costs of lawsuits and regulatory fines resulting from a breach.
- Risk management services help SMBs prevent cyber attacks and reduce the likelihood of data breaches. These services can include cyber security assessments, employee training, and incident response planning.
- A mobile app makes it easier for policyholders to file a claim and make an initial assessment of their issues.
- Limited availability, as Hiscox is only available in 49 out of 50 states in the U.S. and doesn’t cover overseas business branches
- Reviews can be mixed, as some policyholders complain about customer service and the length of time agents can take to respond.
- Requires policyholders to work with other providers to get full business protection
Pricing: To get a cyber insurance policy quote from Hiscox, hiscox.com/small-business-insurance/cyber-security-insurance.
Why Do You Need Cyber Insurance?
Cyber attacks are becoming increasingly sophisticated and damaging, making cyber insurance an essential tool for businesses of all kinds. With customer and company-sensitive information often stored within reach of hackers, the risk of a cyber attack or data breach is only growing. By having a robust cyber insurance policy, your business can proactively manage these risks and ensure they have the necessary resources to recover quickly in the event of an attack. With the cost of an average data breach approaching $10 million in the U.S., according to IBM and Ponemon, cyber insurance is critically important for reducing financial risk.
In addition to providing protection in case of a cyber attack or data breach, cyber insurance policies can offer a range of services to help prevent such incidents from occurring. For example, some policies may include risk assessments, employee training programs, and access to cybersecurity experts who can advise on best practices and help implement security measures. And some partnerships between insurers and security vendors can result in better security at lower cost for policyholders.
Also read: What is Network Security? Definition, Threats & Protections
How Much Does Cyber Insurance Cost?
On average, small to medium-sized businesses pay around $1,500 annually for a $1,000,000 policy limit. However, larger companies or those with higher risk profiles may have to pay a higher premium for coverage. It’s important to note that investing in preventative measures such as regular employee training, strong access controls, and up-to-date security tools can help reduce the risk of a cyber attack and ultimately lower insurance costs over time.
The cost of a cyber insurance policy depends on a variety of factors specific to your business. Insurance companies consider factors such as the type of products or services that your business offers, business size, annual revenue, and the type of sensitive information collected. Additional considerations may include whether the business collects payments, and other relevant risk factors, such as the likelihood of a cyber attack against your particular industry
Also read: Main Targets of Ransomware Attacks & What They Look For
Calculating Cyber Insurance Requirements for Your Business
Determining the right level of cyber insurance coverage can be complicated, and insurance companies use several factors to calculate policy requirements for each business. Here are some factors that a potential insurer will examine to determine how much you need from a cyber insurance policy:
- Business size: Larger businesses generally store more data and are at a higher risk of cyber attacks. If you own a large-scale business, you will likely require more coverage and a higher premium to adequately protect your business.
- Industry type: Some industries, like healthcare and finance, handle sensitive data and are more vulnerable to cyber attacks. This may result in higher premiums and security requirements.
- Risk profile: In addition to industry, insurance providers will evaluate your business’s specific risk profile, including the likelihood and potential impact of a cyber attack. Businesses with a higher risk profile will face higher premiums.
- Security measures: The insurance provider will assess your business’s existing security measures such as firewalls, encryption, and employee training programs. Businesses with better security measures may be eligible for lower premiums.
- Coverage limits: The amount of coverage a business needs will also affect the cost of the policy. Higher policy limits will generally result in higher premiums.
- Claim history: A business’s past claims history will be taken into action when calculating the cost of a policy. If your business has had previous cyber security incidents or claims, you may face higher premiums.
- Deductible: A higher deductible will result in a lower premium, while a lower deductible will result in a higher premium. The amount of the deductible, or the amount your business must pay before the insurance coverage kicks in, will also affect the cost of the policy.
The cost of a cyber insurance policy will depend on a variety of factors specific to your business in addition to what you want to be insured. It is important for you to work with a knowledgeable insurance provider to determine the appropriate coverage and premium to meet your business’s needs.
Selecting a Cyber Insurer
Cyber insurance policies can vary widely in terms of coverage, limits, and exclusions. It is important for you to carefully review and compare quotes to ensure that your business will have the coverage that meets your specific needs and risk profile. This may involve working with an insurance broker or consultant who specializes in cyber insurance to navigate the complex landscape of available options.
When selecting a cyber insurer, organizations should consider a number of different factors, including the financial stability of the vendor, the type of coverage provided (such as breaches, ransomware, DDoS attacks and regulatory compliance), and the cost. In addition, most of the vendors offer ancillary services designed to help protect against, prepare for, and respond to breaches. Partnerships with cybersecurity vendors can be another factor to consider.
If you already have an existing and satisfactory business relationship with an insurer who offers cyber insurance, they may be able to offer attractive rates by packaging cyber insurance with other types of insurance.
Other factors to consider when purchasing cyber insurance are:
- Knowledgeable underwriters: There have been many new entrants to the cyber insurance market over the last several years, with many hoping to take advantage of the fast-growing market and its opportunities. It’s important to work with a carrier who has a strong track record in the market, has shown a commitment over the long-term (some longevity), and can show strong financial stability.
- Quality of coverage: it’s important to know what is really being offered in your policy, and maybe even more important, what’s not. Companies need to look at policy exclusions to see what is being excluded.
- Claims handling: In-house claims expertise and an incident response team is a big plus. Many carriers outsource their claims handling to third parties, which may not be as familiar with the insurance product and, being one step removed, may be less likely to be a true partner for the insured.
Effective cyber risk management requires being prepared, taking all precautions possible to prevent an incident from occurring, but arguably most importantly, knowing how to respond when something happens, and having experts on hand in multiple fields of expertise to assist in claims.
Bottom Line: Cyber Insurance Companies
With the cost and sophistication of cyber attacks continually rising, it is imperative that businesses of all kinds protect their assets with robust cybersecurity controls and comprehensive cyber insurance. With a wide range of policies tailored to fit specific business needs, cyber insurance providers play a crucial role in mitigating potential threats, and they can also offer an easier way for companies to upgrade their cybersecurity controls.
Don’t wait for an attack to occur to take action. Protecting your business today will give it a better chance to survive a cyber attack, will give you greater confidence and peace of mind.