Premiums have gone up by 7% on average for small firms and between 10% and 40% for medium and large businesses.
Ransomware payouts are putting the squeeze on cyber-insurance companies and resulting in higher premiums for organizations that want protection against the threat.
Larger companies are getting hit with bigger price hikes than midsize and small companies because they are the ones that are experiencing the biggest losses, a new study by small-business research firm AdvisorSmith shows.
The company’s review of cyber-insurance premium costs, rate filings, and other insurance data over the past six months shows that the current average cost for $1 million in cyber-liability coverage for a low-risk business with less than $1 million in revenue is $1,589. That’s about 7% higher than the average cost of $1,485 per year for comparable coverage in 2020.
Adrian Mak, CEO of AdvisorSmith, says premiums for midsize and large businesses have gone up substantially more — between 10% and 40% on average over the past year. A midsize business with more than $100 million in revenue currently can pay anywhere between $5,000 and more than $10,000 in premiums per $1 million in coverage. Insurance premiums for large businesses tend to vary widely and are harder to estimate because many insurance contracts are customized and negotiated confidentially for each enterprise, Mak says. “It’s common for larger businesses to have a high deductible or to self-insure a large portion of their risk because they have stronger balance sheets than small businesses,” Mak says.