[SMBs] How Much Cyber Insurance Coverage Do You Need?

November 28th, 2022 | Cyber Insurance

By now, every business owner, big or small, should understand how critical cyber insurance is for protecting their business. Even if you feel you might not be storing information valuable enough for a cyber-attack, you are still a target. It’s not necessarily about stealing your information but gaining access to your identity and using your business email to compromise your clients and partners. A comprehensive cyber insurance policy takes into consideration the full impact a cyber-attack can have on your business and provides coverage for your resulting legal fees, loss of business, and reputational damage. 

How much coverage do I need? 

The answer really depends on your specific business. A helpful exercise can be to think through the cost of downtime for your company. The average downtime from a cyber attack is 7 days, so how much would your company lose if you had to completely halt operations for a week. The cost of downtime, along with the repair costs, legal expenses, loss of business can quickly add up. For smaller businesses, you’re looking at a bare minimum of 1 million in coverage for an adequate stand-alone cyber policy.  

COA: We are not a licensed insurance broker and we are not giving you specific advice about your business. We strongly recommend you engage a cyber insurance specialist to talk through your business and risk, so that they can help you get the coverage that is right for you. Fill out the form on this page if you would like us to put you in touch with a licensed cyber broker who will review your policy.  

3 Key Takeaways: 

Every business is at risk of a cyber-attack 

No matter how big or small your business may be, if you have computer users, you are considered a risk. 

Recommended base limit for ANY business is to have a one-million-dollar policy 

There are too many scenarios that can result in six figure liability costs for your business. 

The amount of cyber insurance you need will depend on the amount of data you store and your security exposures 

Even though there is a recommended minimum, your business could store information that might require a higher policy. Going through an exercise with an expert could lead you in the right direction that will be a good fit for your unique business. 

The answer to “How much coverage do I need?” is not as simple as a yes or a no. Cyber insurance is not a one size fits all concept. However, there are many resources to finding the right policy for your business as well as a recommended starting point no matter the size of your business. The point we want to get across is that cyber threats are not going anywhere. Having cyber insurance is no longer a luxury item, but something that is critical to keeping you and your business secure.  

Looking for more information on cyber insurance? Watch the full version of our recent webinar Cyber Insurance: Getting the Right Coverage & Preparing for Change