Personal Cyber Insurance | NFP (2024)

FAQs

Is personal cyber insurance necessary? ›

Many types of technology around your home are at risk without proper personal cyber protection, including: Smart home devices like speakers, plugs, thermostats and lights. Tablets, laptops, computers and phones. Pet cameras, home security cameras, video doorbells and smart locks.

Businesses should consider cyber insurance a risk management tool, but it's not a comprehensive solution to all cybersecurity challenges. It also may be beyond some small businesses' financial means, and the cost is increasing.

Demand, losses, and premiums are all on the rise

The demand for cyber insurance coverage is skyrocketing. At the same time, insurance providers' losses are growing. High demand in combination with high payouts lead to increased premiums. Businesses report premium hikes of 50% and even 100% year over year.

What is the average cost of cyber insurance? The average annual premium for personal cyber insurance is between $300 and $1,200, depending on the level of coverage and the specific deductible you choose. The average cost of cyber insurance for a business is between $500 and $5,000 per year.

Today, the average cost of cyber claims is substantial, far exceeding the average cost of cyber premiums. And considering the proactive and reactive services on offer, it's clear that cyber insurance is more than worth the money.

If you own a business that collects or stores sensitive information, such as customer/supplier data or financial information, you may be at risk. Cyber insurance can help protect you from the financial consequences of a breach of these data and a disruption of your business.

Loss of value through intellectual property (IP) theft

Often, they won't recognize IP theft until long after an incident (for example, when a competitor takes a new product to market). Nevertheless, devaluation due to IP theft is a loss most cyber policies don't cover.

A cyber-attack can do more than just cost your business money - it can also damage your reputation. Cyber liability insurance can provide the resources you need to repair your company's image after an attack. This could include public relations services, crisis management support, and other reputation management tools.

The average cyber liability coverage limits typically fall between $500,000 and $5 million per incident. It is important to keep these limits in mind when looking at cyber insurance cost. As more cyber incidents occur, we have seen a 28% cyber insurance premium increase in 2022.

You can buy cyber risk insurance directly from an insurer or from a broker. You can find brokers specialising in cyber insurance through the British Insurance Brokers' Association (BIBA).

How popular is cyber insurance? ›

The global cyber insurance market tripled in volume in the five years ending in 2022, according to the Swiss Re Institute, with direct written premiums worldwide totaling an estimated $13 billion.

Personal cyber insurance can cover most forms of cyber attacks, such as theft through a network, computer or digital device and having digital property destroyed, altered or shared.

An essential part of cyber risk management, cyber insurance helps businesses respond and recover from the financial costs of a cyber event, including loss from operational disruption, remediation and recovery expenses, legal fees, reputational harm, regulatory fines and more.

It's important to create a cyber security policy for your business – particularly if you have employees. It helps your employees to understand their role in protecting the technology and information assets of your business.

Without insurance, your business is exposed to the full financial impact of a cyber incident. This can include the costs of notifying affected parties, legal fees, and potential regulatory fines. Without insurance, these expenses could significantly strain your company's finances.

So having your own cyber insurance is critical to addressing the totality of exposure to a breach. Even if you carry your own cyber insurance, however, it's a good idea to require the cloud service provider to carry cyber coverage as well to help fund a loss.