Cyber insurance is becoming an increasingly important part of risk management for businesses of all sizes around the country as our society and economy becomes increasingly digital. With everything from personal information to credit card payments being transacted and stored on computer systems, to point of sale and operational systems that are connected to the internet, businesses increasingly have larger attack surfaces for hackers and digital criminals. An important step that businesses can take to protect themselves financially from the impact of cyber incidents is purchasing cyber insurance.
In this analysis, AdvisorSmith examined rate filings from dozens of insurers offering cyber insurance in various industries to find the average cost of cyber insurance by industry. Because the cost of cyber insurance is driven by the type of risk exposure that a business presents, insurance premiums for cyber coverage vary widely between different industries. Since some industries have much more sensitive data or financial transactions stored in their business systems than others, their costs for cyber insurance can be higher than others.
Average Cost of Cyber Insurance by Industry
The table below shows the average annual cyber insurance premiums across 39 major industries for companies with $1 million in revenue, for $1 million in cyber liability coverage, with $10,000 of retention.
The five industries with the highest cyber insurance costs were:
- Payment Processing
- Financial Services (other)
- Investment Services
- Law Firms
- Insurance
The five industries with the lowest cyber insurance costs were:
- Transportation & Logistics
- Administrative Services
- Manufacturing & Industrial
- Auto Dealers
- Construction & Contractors
Below are the average annual cyber insurance premiums listed by industry:
| Industry | Average Cost of Cyber Insurance |
|---|---|
| Accounting | $1,821 |
| Administrative Services | $971 |
| Aerospace & Defense | $1,503 |
| Auto Dealers | $1,070 |
| Banking | $1,858 |
| Charities | $1,433 |
| Construction & Contractors | $1,070 |
| Consumer Products | $1,548 |
| Consumer Services | $1,433 |
| E-Commerce | $2,097 |
| Education (excluding higher education) | $1,273 |
| Entertainment & Recreation | $1,374 |
| Financial Services (other) | $2,429 |
| Food & Beverage | $1,070 |
| Gaming | $2,139 |
| Healthcare | $1,985 |
| Higher Education | $1,503 |
| Hospitality | $1,663 |
| Insurance | $2,235 |
| Investment Services | $2,280 |
| Law Firms | $2,269 |
| Manufacturing & Industrial | $975 |
| Media & Publishing | $1,779 |
| Membership Organizations | $1,277 |
| Oil & Gas | $2,131 |
| Payment Processing | $2,449 |
| Pharmaceuticals | $2,226 |
| Professional Services (other) | $1,476 |
| Public Non-Profit | $1,336 |
| Real Estate Leasing & Property Management | $1,418 |
| Real Estate Sales | $1,495 |
| Restaurants | $1,424 |
| Retail (excluding restaurants) | $1,857 |
| Technology | $1,503 |
| Telecommunications | $2,044 |
| Transportation & Logistics | $909 |
| Travel Agency | $1,503 |
| Utilities | $1,693 |
| Wholesale Trade & Distribution | $1,072 |
Average Overall Cost of Cyber Insurance
In our 2020 study of cyber insurance costs, we found that, overall, premiums ranged from $650 to $2,357 for cyber insurance, based upon companies with moderate risks. These premiums were based upon liability limits of $1,000,000, with a $10,000 deductible, and $1,000,000 in company revenue.
The overall average cost of cyber insurance is $1,485 per year in the U.S. The costs of insuring your business against data breaches and hacking attacks vary based upon the nature and size of your business, as well as the state in which your business is located. For example, the average cost in Michigan was $1,339 for our example scenario, while similar coverage in Minnesota was $1,708. Below, we list the average cost of cyber insurance in each state, along with the difference between the state average and the national average.
| State | Average Cost of Cyber Insurance | Difference from National Average |
|---|---|---|
| Alaska | $1,532.89 | 3.23% |
| Alabama | $1,539.40 | 3.67% |
| Arkansas | $1,646.50 | 10.88% |
| Arizona | $1,581.50 | 6.50% |
| California | $1,430.18 | -3.69% |
| Colorado | $1,521.67 | 2.47% |
| Connecticut | $1,593.62 | 7.32% |
| District of Columbia | $1,539.25 | 3.66% |
| Delaware | $1,446.47 | -2.59% |
| Florida | $1,529.82 | 3.02% |
| Georgia | $1,450.54 | -2.32% |
| Hawaii | $1,519.46 | 2.32% |
| Iowa | $1,505.73 | 1.40% |
| Idaho | $1,483.70 | -0.08% |
| Illinois | $1,434.59 | -3.39% |
| Indiana | $1,484.06 | -0.06% |
| Kansas | $1,501.38 | 1.11% |
| Kentucky | $1,587.10 | 6.88% |
| Louisiana | $1,623.94 | 9.36% |
| Massachusetts | $1,380.59 | -7.03% |
| Maryland | $1,471.18 | -0.93% |
| Maine | $1,467.39 | -1.18% |
| Michigan | $1,339.33 | -9.81% |
| Minnesota | $1,708.11 | 15.03% |
| Missouri | $1,509.00 | 1.62% |
| Mississippi | $1,472.55 | -0.84% |
| Montana | $1,478.29 | -0.45% |
| North Carolina | $1,421.49 | -4.27% |
| North Dakota | $1,464.42 | -1.38% |
| Nebraska | $1,485.64 | 0.05% |
| New Hampshire | $1,431.99 | -3.57% |
| New Jersey | $1,615.25 | 8.77% |
| New Mexico | $1,355.36 | -8.73% |
| Nevada | $1,507.55 | 1.52% |
| New York | $1,616.70 | 8.87% |
| Ohio | $1,553.68 | 4.63% |
| Oklahoma | $1,513.03 | 1.89% |
| Oregon | $1,462.50 | -1.51% |
| Pennsylvania | $1,466.49 | -1.24% |
| Rhode Island | $1,541.58 | 3.81% |
| South Carolina | $1,398.83 | -5.80% |
| South Dakota | $1,489.45 | 0.30% |
| Tennessee | $1,500.20 | 1.03% |
| Texas | $1,459.22 | -1.73% |
| Utah | $1,515.10 | 2.03% |
| Virginia | $1,467.83 | -1.15% |
| Vermont | $1,457.70 | -1.83% |
| Washington | $1,449.80 | -2.37% |
| Wisconsin | $1,523.03 | 2.56% |
| West Virginia | $1,629.64 | 9.74% |
| Wyoming | $1,426.89 | -3.91% |
Besides the location of your business, a number of other factors can greatly affect the premiums that you pay for cyber insurance. Insurance companies will take into account the nature of your business, the number of sensitive employee and customer records you store, whether your business stores credit card and banking information on your customers, and the types of security defenses your company has undertaken. Additionally, if your company has a history of cyber insurance claims or if it has been attacked or hacked in the past, your premiums may be higher.
Methodology
To determine the average cost of cyber insurance by industry, AdvisorSmith studied rate filings from companies offering cyber insurance in the state of Ohio, as published in SERFF, The System for Electronic Rates & Forms Filing. Our study tabulated cyber insurance rates from over 50 rate filings from 2019-2020. The pricing quoted was based upon small businesses with $1 million in revenue, for $1 million in cyber liability coverage, with a $10,000 retention.
