AdvisorSmith evaluated financial strength, customer satisfaction, ease-of-use, and more to find the best commercial cyber insurance companies.
Cyber insurance is becoming increasingly important as companies rely more on digital systems and as cyberattacks, ransomware attacks, and data breaches become more prevalent. Many companies manage sensitive data, including credit card information, customer names and addresses, Social Security numbers, or other confidential information. If your company is affected by a cyberattack, you could find yourself dealing with costly lawsuits, data restoration expenses, and regulatory fines.
To determine the best cyber insurance companies, AdvisorSmith considered a number of factors, including financial strength ratings from AM Best and Standard & Poor’s, customer satisfaction data from several J.D. Power studies, complaint ratings from the National Association of Insurance Commissioners, available features and options, and availability of information and ease of use of the insurers’ websites. We scored insurers out of a total of five points and only included those companies that scored 4.0 or higher.
The Best Cyber Insurance Companies
|1||Chubb||5.0 / 5.0|
|2||The Hartford||4.9 / 5.0|
|3||AIG||4.7 / 5.0|
|4||CNA||4.7 / 5.0|
|5||Hiscox||4.6 / 5.0|
|6||Arch||4.5 / 5.0|
|7||Hanover||4.5 / 5.0|
|8||Intact||4.4 / 5.0|
|9||Beazley||4.3 / 5.0|
|10||Axis||4.3 / 5.0|
*Not all insurance companies provide coverage in all states.
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More on the Best Cyber Insurers
AdvisorSmith found and rated the top commercial cyber insurance companies on a five-point scale, based on financial strength, customer satisfaction, ease-of-use, and a number of other factors. While many insurers were evaluated, only those with a score of 4.0 or more are listed below.
5.0 / 5.0
Chubb has an A++ rating from AM Best and an AA rating from Standard & Poor’s, indicating excellent financial strength. The company has offered cyber liability insurance since 1998 and offers several customizable cyber liability programs for businesses of all sizes and from all industries, including those industries that have a high frequency of cyber incidents. Chubb offers risk management information and assessments, along with a variety of services to minimize risk and mitigate losses.
4.9 / 5.0
The Hartford has been given an A+ rating by both AM Best and Standard & Poor’s. The insurer offers two cyber policies: data breach insurance for small businesses and cyber liability insurance for larger businesses. Data breach policies can also be customized with business income and extra expense coverage, prior acts coverage, and extortion coverage. The Hartford’s Cyber Center provides information on how to avoid incidents and maintain online safety. The Hartford also offers online quoting.
4.4 / 5.0
AIG has an A rating from AM Best and an A+ from Standard & Poor’s. The company offers data, analytics, and detailed threat scoring and analysis to help insureds understand and deal with their cyber risks. Additional loss prevention services can provide protection from ransomware, phishing attempts, and other threats. AIG also offers a 24/7 claims hotline.
4.3 / 5.0
CNA received an A rating from AM Best and an A+ from Standard & Poor’s. CNA’s cyber insurance products are available to businesses of all sizes. CNA’s CyberPrep cyber risk program is available to all policyholders and is designed to help insureds identify, mitigate, and respond to cyber threats. An online portal provides resources and tools to help policyholders learn about cybersecurity and prepare for incidents.
4.0 / 5.0
Hiscox received A ratings from both AM Best and Standard & Poor’s. Hiscox’s cyber liability insurance is designed for small businesses and includes coverage for common costs resulting from cyber crimes, including breaches, extortion, and social engineering schemes. Insureds can upgrade their coverage to include digital media coverage for copyright infringement, invasion of privacy, and other claims that arise from your website or social media presence.
Brokers for Cyber Insurance
Because cyber insurance is a specialized coverage that can vary widely depending on your business’s individual needs, it’s common for companies to obtain coverage through a broker. A broker can help you find the most cost-effective and complete coverage from an appropriate insurer. Below, we’ve highlighted a few of the top brokers that offer cyber insurance.
CoverageSmith is a leading online broker specializing in insurance for small businesses. The company provides a modern, tech-enabled solution for businesses, allowing them to quickly get the insurance they need, completely online, from some of the most trusted insurance carriers in the world, including Chubb, The Hartford, AIG, and CNA.
CoverWallet is an online broker backed by Aon, an insurer with an A rating from AM Best. The company provides online quotes, assessments to help you understand what types of insurance your business needs, and online claims processes. CoverWallet also provides information and reading material on cyber liability. It may be possible to manage your pre-existing insurance policies through CoverWallet.
Embroker is backed by Munich Re, a financially strong insurer with an A+ rating from AM Best and an AA- rating from Standard & Poor’s. Embroker offers online quotes and claims, in addition to assistance that is available 24/7 via live chat, email, or phone. Embroker also provides a personal account manager who can help with insurance needs.
How much does cyber insurance cost?
The average cost of cyber insurance in the U.S. in 2020 was $1,485 per year, but premiums have been increasing in 2021 due to a rise in cyberattacks. The costs of insuring your business against data breaches and hacking attacks varies based upon the nature and size of your business, as well as the state in which your business is located. 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|
|District of Columbia||$1,539.25||3.66%|
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.
What does cyber insurance cover?
Cyber insurance covers financial losses from data breaches, hacking, viruses, denial of service attacks, and other similar cyber events. Cyber insurance has two major components: third-party liability coverage and first-party coverage.
First-party coverage protects your company when you incur expenses from a data breach or when your company is hacked. You may choose to purchase either or both types of coverage.
Third-party coverage provides protection when a customer, vendor, partner, or other party sues you for allowing a data breach to happen.
First-party coverage provides protection against the financial losses your business incurs due to a data breach, hack, or other cyber event.
First-party coverage can provide for the costs of responding to and recovering from a data breach. These costs can include:
- Notifying your customers or employees affected by the breach
- Providing credit monitoring services to those affected
- Hiring technical consultants or lawyers
- Advertising and public relations costs
If your company’s electronic data is lost, damaged, or corrupted due to a hack, virus, or denial of service attack, you can be covered under first-party coverage. This coverage also extends to data belonging to others stored on your systems.
First-party coverage will reimburse your company for the costs to restore or recover the lost or damaged data, as well as the costs to hire consultants to help you restore or repair your data.
Business income insurance, also known as business interruption insurance, is also available on many cyber insurance policies. A typical business income insurance policy that is attached to a commercial property policy only covers perils that cause physical damage. Usually, commercial property coverages do not provide coverage for electronic data.
If the loss or destruction of data leads to a disruption in your ability to do business, this coverage can pay for the loss of business income your business experiences.
First-party coverage can also cover cyberextortion. If your business is threatened with damage to your computer systems or networks unless you pay a ransom, this insurance can provide coverage.
First-party coverage can also provide coverage for the money you spend to respond to the extortion demand, in addition to any ransom you pay. The insurer’s consent is usually required before you pay these expenses.
Third-Party Liability Coverage
The third-party liability coverage provided by cyber insurance provides protection against lawsuits filed by clients or others against your business as a result of a breach of their security or privacy. These lawsuits can accuse your business of failing to adequately protect data you possess that belongs to customers, employees, vendors, or others.
Some of the claims and costs that third-party liability may cover include:
- Legal expenses
- Network security claims
- Privacy claims
- Employee privacy liability
- Regulatory fines
In order to determine the best cyber insurance companies, AdvisorSmith considered a number of factors that reflect an insurer’s financial strength, customer satisfaction, and ease-of-use. Using our own proprietary scoring algorithm, we weighted the various factors based upon what we believe to be important for small and midsize business owners. These factors included carrier ratings from AM Best and Standard & Poor’s, customer satisfaction data from several J.D. Power studies, complaint ratings from the National Association of Insurance Commissioners, an evaluation of each insurer’s policies, options, and website features, and more. Our algorithm outputted a score out of five total points. While we considered a number of insurers, we only included in this article those companies that scored 4.0 or higher.
The AdvisorSmith rankings are based upon our editorial team’s quantitative and qualitative analysis, and they are intended to serve only as a guide for our readers. We encourage our readers to conduct their own research when selecting an insurer, shop and compare quotes, and make a decision based on their own unique business needs.
AdvisorSmith is in no way compensated for any of our reviews.