How Much Does Cyber Insurance Cost in Canada?
Posted on Thursday, January 11, 2024 and filed under Articles
Cyber insurance costs in Canada start at approximately $550 annually. This rate covers most of the financial consequences of a cyber attack. However, this price can vary greatly depending on the size of your company, your industry, and the amount of sensitive data you handle.
Despite the initial cost, cyber insurance is a valuable investment for businesses. The average cyber breach can cost over $4 million, factoring in recovery, legal fees, and potential regulatory fines. Having a good portion of those costs covered can make a significant difference on your road to recovery.
| “Almost any type of business can benefit from cyber insurance, but for highly regulated industries, it’s basically a necessity.” – Jim Stackhouse, Founder & Chief Technologist, NeoLore Networks |
Of course, any business owner would want to know more than that before they invest in an additional annual fee. Like any insurance premium, you can also get a lower rate if you have a lower security risk profile. To help you get started, this article will provide an overview of what you need to know about cyber insurance.
Why Should Canadian Businesses Invest in Cyber Liability Insurance?
Nearly 60% of small and medium-sized companies do not recover after a cyber attack. That’s largely because, in many cases, the cost of mitigating the incident is more than the business can reasonably afford. This statistic underscores the critical need for cyber liability insurance as a key component of your risk management strategy.
Cyber liability insurance often goes beyond mere financial compensation. It may also offer support for data restoration, business interruptions, and legal liability. This support helps businesses respond effectively to cyber threats without bearing the full brunt of the associated costs.
How Much Does Cyber Security Insurance Cover?
In Canada, cyber insurance covers a broad range of associated costs. The price may vary based on your insurer or risk profile. Insurers may offer better rates to businesses that show they are taking steps to minimize their risk exposure. Here is what they typically cover.
Data Breach Response
Cyber insurance covers the costs associated with responding to a data breach. This includes customer notification, credit monitoring, and public relations efforts. An effective, immediate response is crucial in maintaining customer trust and can potentially limit long-term damage.
Business Interruption Losses
This aspect of coverage compensates for the income lost during the period where business operations are halted due to a cyber event. It helps companies stay afloat financially while systems are being restored.
Cyber Extortion
Insurance policies often cover ransom payments demanded by cybercriminals during a ransomware attack. This coverage provides businesses with the means to negotiate with attackers and potentially avoid greater losses.
| Measuring the ROI of Your Cybersecurity Investments? Learn More About That! |
Third-Party Damages
If a cyber incident affects third-party partners or customer data, cyber insurance can cover the damages claimed by these parties. Third-party coverage is key in managing the effects the attack may have had on external stakeholders.
Legal Support
In the event of lawsuits or legal claims following an incident, cyber insurance can cover legal costs and settlements. This support helps businesses to navigate the legal issues that can arise from cyber incidents.
Data Restoration
Coverage often includes the costs of restoring data and systems affected by a cyber attack. This makes it easier for businesses to recover lost information and return to normal operations sooner.
Regulatory Fines
When businesses face regulatory fines due to cyber incidents, cyber insurance can help cover these costs. This coverage is particularly important as it helps businesses comply with compliance requirements without bearing the full financial burden.
How to Improve Your Cyber Risk Profile
Even though it’s worth the cost, cyber insurance can still get pricey. Luckily, taking certain security measures can help lower the cost of your premiums in some cases.
Enforce Strong Access Controls
Implement strict access controls to ensure that only authorized personnel have access to information. This reduces the risk of data breaches from both external attacks and internal threats. If you store sensitive information, this is probably already a compliance requirement.
Conduct Regular Cybersecurity Awareness Training
Training staff to recognize and respond to cyber threats can significantly reduce the risk of attacks due to human error. Keeping a detailed record of all training sessions and employee participation can provide insurers with tangible evidence of your proactive risk management efforts.
Schedule Regular Penetration Testing
Regular testing can demonstrate the strength of your security measures and show insurers that you’re actively working to find and fix vulnerabilities. Additionally, penetration tests that simulate the latest attack techniques can keep you ahead of emerging threats.
Implement Reliable Data Backup Processes
Reliable backups are essential for a swift recovery. Plus, showing that you can recover without paying a ransom during a ransomware attack is important to insurers. A good backup process involves regular, encrypted backups stored in multiple locations, both onsite and off site.
Get External Assistance
Consider an outsourced cybersecurity partner to enhance your security measures. They can bring expertise and resources that might be too costly or complex to develop in-house. Their involvement can also be a positive factor for insurers as they assess your risk profile.
Need Help Protecting Your Business?
Today, there’s an ever-present risk of attacks leading to significant financial and reputational damage. That’s why cyber insurance is a good idea, and finding smart ways to reduce your premiums is even better. Outsourcing cybersecurity will help, but you need to be sure you’re choosing the best provider.
NeoLore Networks offers powerful cybersecurity solutions, provides vigilant monitoring, and rapid incident response services. Our services will both keep you secure and help you show your insurer that you’re taking action to decrease your cybersecurity risks.
Talk to us today to get started.