How are Cyber liability insurance premiums based? Several key factors that help insurers assess the level of risk a business poses and determine the appropriate coverage.

1. Industry Type

• Certain industries are more vulnerable to cyber attacks, particularly those that handle large volumes of sensitive data, such as healthcare, finance, retail, and law firms. Businesses in these industries typically face higher premiums due to the heightened risk.

2. Business Size and Revenue

• The size of the business, including the number of employees and its annual revenue, often influences the policy cost. Larger businesses generally face higher premiums because they may handle more sensitive data and have more complex systems, increasing the potential impact of a cyber attack.

3. Data Volume and Type

• The amount and type of data a company collects and stores play a significant role in determining the premium. Companies that store highly sensitive information (such as credit card details, personal health information, or social security numbers) tend to face higher premiums because breaches involving this data can be particularly costly.

4. Security Measures in Place

• A business's cybersecurity posture significantly affects its premium. Companies with robust cybersecurity defenses—such as firewalls, encryption, multi-factor authentication, regular software updates, and employee training programs—are considered lower-risk and may qualify for lower premiums.

5. Claims History

• If a business has a history of cyber incidents or data breaches, its insurance premium will likely be higher. Insurers consider past claims as indicators of future risk, so a history of claims increases the perceived likelihood of future cyber events.