Introduction to Cybersecurity Insurance Costs: A Guide by an IT Firm in Greenville

Greenville, United States - January 19, 2025 / AT-NET Services - Greenville Managed IT Services Company /

Cybersecurity Insurance: Importance and Cost by Greenville's Leading IT Company

The growing risks associated with cyber threats have made cyber insurance a vital necessity for companies of all sizes. However, many organizations are noticing a significant increase in cyber insurance costs. This has sparked concern for businesses trying to balance comprehensive coverage with their budget.

Jeffrey S. King, President of AT-NET, notes that “Cyber insurance pricing is rising because the risks are evolving rapidly, and businesses need to adapt to these changes.”

The price of cybersecurity insurance rose 11% in the first quarter of 2023. For businesses looking to safeguard themselves from cyber risks, understanding what drives these rising costs is essential.

In this blog, experts from the leading IT firm in Greenville explore the factors influencing cyber insurance costs and offer actionable insights to help you effectively lower your premiums.

What Is Cyber Insurance and Why Does It Matter?

Before diving into costs, it’s important to understand what cyber insurance is. Cyber insurance is a policy designed to help businesses mitigate the financial risks of cyber incidents like data breaches, network attacks, and other online threats.

It can cover everything from legal fees to damage control, but the coverage varies depending on the provider and policy type.

As the digital landscape continues to evolve, the importance of this insurance grows, particularly with businesses storing and processing increasing amounts of sensitive customer data.

How Much Does Cyber Insurance Cost?

When it comes to how much cyber insurance costs, the answer isn’t straightforward. The cost of cyber liability insurance varies based on several factors, including the size of the business, the industry, and the level of coverage needed.

Typically, small to medium-sized businesses can expect to pay between $1,000 and $7,000 annually for a policy, while large organizations might pay much more due to their higher-risk profiles.

Several factors contribute to this range. Let’s take a look at the most common ones.

Factors Influencing Cyber Insurance Costs

Several factors play a key role in determining cyber insurance costs. Understanding these elements can help you navigate pricing and secure the best coverage for your business.

1. Business Size and Revenue

Larger businesses often face more risk, simply due to the volume of data they manage. With more assets to protect, their cyber insurance premiums are generally higher.

On the other hand, smaller businesses with less complex IT infrastructures may pay less for coverage. However, don’t be fooled—small businesses are often more vulnerable to attacks and need protection just as much.

2. Industry and Risk Level

Certain industries, such as healthcare and finance, are more likely to be targeted by cybercriminals due to the sensitive data they handle. As such, businesses in these sectors tend to pay higher premiums because of the perceived risks involved.

Meanwhile, companies in less regulated industries may find their premiums to be lower, but still substantial.

3. Security Posture

Insurance providers heavily weigh the effectiveness of your company’s cybersecurity measures when determining your cyber insurance costs. Businesses that have strong data protection policies, regular security audits, encryption methods, and secure employee training programs can expect lower premiums.

Cybersecurity insurance costs are often lower for companies that proactively mitigate risks and demonstrate a commitment to security.

4. Claims History

If your business has experienced a cyber attack or data breach in the past, it may affect your premiums.

Insurance companies consider claims history to assess the likelihood of future incidents. A company with a history of breaches may face higher premiums, while those with a clean record may benefit from lower costs.

How Much Does Cyber Liability Insurance Cost for Small Businesses?

Small businesses, often the most vulnerable to cyber threats, have been hit hardest by the rise in cyber liability insurance costs.

With cyber attacks on the rise, small companies are finding that cybersecurity premiums are escalating, making it harder to afford adequate coverage. However, the cost of cyber liability insurance isn’t the same for every small business.

For small businesses, the cost can range significantly based on the factors mentioned above. On average, small businesses can expect to pay between $1,000 and $3,000 annually for cybersecurity insurance.

However, some may face higher rates, particularly if they have higher-risk profiles due to their industry or claims history.

Why Your Business Shouldn’t Skip Cyber Insurance

While the rising costs of cyber insurance may be alarming, businesses must understand the value of the coverage. The financial burden of a cyberattack can far outweigh the cost of insurance.

According to IBM, the average cost of a data breach in 2024 is about $4.88 million, which is a significant sum for any business, especially small to medium-sized ones.

Cybersecurity breaches are not just about losing data; they can lead to expensive lawsuits, regulatory fines, and reputational damage.

Investing in cyber insurance can help minimize these risks and provide the resources needed to recover from an incident quickly.

Steps You Can Take to Lower Cyber Insurance Costs

While it may seem like cyber liability insurance costs are non-negotiable, there are strategies you can implement to lower your premiums:

1. Invest in Strong Cybersecurity Measures

Having a robust cybersecurity posture can significantly reduce your premiums. Consider investing in next-gen firewalls, data encryption, and endpoint detection and response (EDR) solutions to reduce your risk.

2. Implement Comprehensive Employee Training

One of the most common causes of cyber attacks is human error. In fact, 25% of employees tend to click most of the links sent to them via email or social networks.

By training employees to spot phishing scams, understand security protocols, and follow best practices, you can reduce your risk profile and, in turn, lower your insurance premiums.

3. Maintain a Solid Incident Response Plan

Insurance companies prefer businesses that have a clear plan in place to deal with potential cyber incidents. By having an incident response plan ready, you can demonstrate to insurers that you’re proactive and prepared for the worst-case scenario.

4. Bundle Policies

If you already have other business insurance policies in place, consider bundling your cybersecurity insurance with them. Many insurers offer discounts for bundling, which can help you save money.

Key Coverage Options and Their Impact on Cyber Insurance Costs

As businesses assess their cyber insurance needs, it’s important to understand the different coverage options available. The table highlights the key components that influence your policy selection and overall cost.

Coverage Type	Description	Impact on Premium
Cyber Liability Insurance	Protects against data breaches, privacy violations, and business interruptions.	High – Covers a wide range of risks.
Access Control	Covers loss of income due to a cyber event that disrupts operations.	Moderate – Depends on the size of the business and potential loss.
Network Security	Covers third-party damages caused by failures in network security or data breaches.	High – Critical for businesses with significant digital assets.
Compliance	Covers legal costs associated with failure in providing professional services or advice leading to a cyber event.	Moderate – Ideal for tech-related businesses.
Incident Response	Protects the business from expenses related to data breach notification and recovery efforts.	High – Vital for businesses holding sensitive customer data.

Secure the Right Cyber Insurance with a Leading IT Company in Greenville

Cyber insurance costs shouldn’t deter you from securing your business. By understanding the factors that drive cyber insurance costs and implementing proactive security measures, you can reduce your premiums while ensuring that your business is protected.

AT-NET is a trusted provider of comprehensive cybersecurity solutions and can help you lower your risk profile and consequently lower your cyber insurance costs.

Reach out to the most trusted IT company in Greenville, to schedule a consultation and ensure your business is fully protected from the evolving cyber threat landscape.