Running your own business can be an exciting endeavor, but it’s important to stop and consider the risks your business may face and how you can successfully safeguard your business from any unfortunate events.
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TablePress
| State | Average Cost of Cyber Insurance (2020) | Average Cost of Cyber Insurance (2019) | Percent Change |
|---|---|---|---|
| Alaska | $1,532.89 | $1,562.70 | -2% |
| Alabama | $1,539.40 | $1,436.64 | 7% |
| Arkansas | $1,646.50 | $1,288.00 | 28% |
| Arizona | $1,581.50 | $1,139.00 | 39% |
| California | $1,430.18 | $1,594.47 | -10% |
| Colorado | $1,521.67 | $1,575.46 | -3% |
| Connecticut | $1,593.62 | $1,588.45 | 0% |
| District of Columbia | $1,539.25 | $1,536.00 | 0% |
| Delaware | $1,446.47 | $1,626.92 | -11% |
| Florida | $1,529.82 | $1,536.00 | 0% |
| Georgia | $1,450.54 | $1,483.92 | -2% |
| Hawaii | $1,519.46 | $1,277.50 | 19% |
| Iowa | $1,505.73 | $1,444.85 | 4% |
| Idaho | $1,483.70 | $1,421.35 | 4% |
| Illinois | $1,434.59 | $1,516.27 | -5% |
| Indiana | $1,484.06 | $1,546.25 | -4% |
| Kansas | $1,501.38 | $1,444.12 | 4% |
| Kentucky | $1,587.10 | $1,466.44 | 8% |
| Louisiana | $1,623.94 | $1,353.25 | 20% |
| Massachusetts | $1,380.59 | $1,277.50 | 8% |
| Maryland | $1,471.18 | $1,482.50 | -1% |
| Maine | $1,467.39 | $1,502.91 | -2% |
| Michigan | $1,339.33 | $1,232.67 | 9% |
| Minnesota | $1,708.11 | $1,253.67 | 36% |
| Missouri | $1,509.00 | $1,340.65 | 13% |
| Mississippi | $1,472.55 | $1,452.88 | 1% |
| Montana | $1,478.29 | $1,411.67 | 5% |
| North Carolina | $1,421.49 | $1,611.00 | -12% |
| North Dakota | $1,464.42 | $1,344.90 | 9% |
| Nebraska | $1,485.64 | $1,427.87 | 4% |
| New Hampshire | $1,431.99 | $1,416.71 | 1% |
| New Jersey | $1,615.25 | $1,521.92 | 6% |
| New Mexico | $1,355.36 | $1,350.23 | 0% |
| Nevada | $1,507.55 | $1,416.39 | 6% |
| New York | $1,616.70 | $1,410.71 | 15% |
| Ohio | $1,553.68 | $1,277.50 | 22% |
| Oklahoma | $1,513.03 | $1,500.18 | 1% |
| Oregon | $1,462.50 | $1,452.44 | 1% |
| Pennsylvania | $1,466.49 | $1,471.70 | 0% |
| Rhode Island | $1,541.58 | $1,541.06 | 0% |
| South Carolina | $1,398.83 | $1,483.00 | -6% |
| South Dakota | $1,489.45 | $1,308.00 | 14% |
| Tennessee | $1,500.20 | $1,540.08 | -3% |
| Texas | $1,459.22 | $1,385.34 | 5% |
| Utah | $1,515.10 | $1,467.16 | 3% |
| Virginia | $1,467.83 | $1,345.81 | 9% |
| Vermont | $1,457.70 | $1,563.06 | -7% |
| Washington | $1,449.80 | $1,372.80 | 6% |
| Wisconsin | $1,523.03 | $1,472.72 | 3% |
| West Virginia | $1,629.64 | $1,531.83 | 6% |
| Wyoming | $1,426.89 | $1,341.11 | 6% |
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Most employers in Michigan will need to purchase Workers’ Compensation Insurance. The following are regulations for what types of companies must carry coverage:
- All private employers regularly employing one or more employees 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks
- All private employers regularly employing three or more employees at a time
- Agricultural employers if they employ three or more employees 35 hours or more per week for 13 or more consecutive weeks
- Households employing domestic servants if they employ anyone 35 hours or more per week for 13 weeks or longer during the preceding 52 weeks
- All public employers
The Michigan Workers’ Disability Compensation Act (WDCA) defines all of the requirements for Workers’ Comp in Michigan, and the Michigan Workers’ Disability Compensation Agency (WCA) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.
This is an article subheading, it may be long and is likely to wrap.
Almost all workers are covered under Workers’ Compensation in Michigan. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance.
Expert Commentary
AdvisorSmith spoke with the following experts to provide critical insight on cyber insurance for business owners.
Bruce deGrazia
- Program Chair for Cybersecurity Management and Policy
- University of Maryland Global Campus
Dr. Shiu-Kai Chin
- Professor of Electrical Engineering & Computer Science
- Syracuse University
Q. Should small businesses be concerned about cyber risk?
Bruce: Absolutely. In fact, small businesses are a more likely target than a Fortune 500 company. Hackers know that the large companies have a staff of IT people dedicated to protecting the organization’s network. They also have CISOs and risk management people on staff. Small businesses have none of these things, but still have assets worth taking.
Shiu-Kai: Yes. Cyber risk involves more than information. It includes the control of funds and information, i.e., the command and control of your business operations. If you lose control, your business operations will stop. Just look at the recent collapse of Colonial Pipeline operations.
Q. Where do you see the cyber insurance market trending, and what are the main insurability challenges?
Bruce: In my opinion, the cyber insurance market will increase. More companies are trying to transfer their risk and the best way to do that is by purchasing insurance. The main cyber insurance challenge is to determine what risks are covered by the policy.
Shiu-Kai: The challenges organizations and people have is adequately estimating cyber risk, i.e., how well a system is conceived, designed, implemented, operated, and monitored to assure mission-essential functions are available with safety, integrity, and security. Many risk methods are based on guesses in the form of probabilities of likelihood. The [research] by Romanosky, Ablon, Kuehn, and Jones of RAND have a devastating and amusing summary of the situation, after they reviewed cyber insurance policies: carriers don’t know to price cyber risk. The research we are doing with DoD, NSF, and relevant Defense Corporations applied directly to mission assurance, risk management, and certification of trustworthy systems.
Q. How can a business effectively organize and manage cyber risk?
Shiu-Kai: Mitigating cyber risk is much like mitigating risk in your financial operations. Just like you think about who touches or has access to your money and why, think about who touches and has access to your computer-based operations and why.
Think about the controls on your essential computer-based operations, transactions, command-control-and-communications (C3). Answer the question, “What controls are in place to assure that only those who are authenticated and authorized actually get to execute or deny those C3 operations?” If you think about authenticating and authorizing C3 operations as if those operations were money, you’ll be on the right track.
Bruce: Every business, regardless of size, should have a risk assessment done. Also, although they don’t need to employ a cybersecurity specialist full-time, they all should have one on retainer.
Final Word
Cyber insurance is becoming more and more important for businesses, small and large. While the threat of hacking and data breaches increases, it’s important to understand how cyber insurance is priced and where pricing is going.