Even Small Businesses Need Cyber Liability Insurance

Cyber liability insurance protects your business from any financial losses if it suffers a data breach, ransomware attack or any other type of cyberattack.

This type of insurance has only become more important as a greater number of small businesses store customer data, expansion plans, revenue reports and other valuable key documents online. It’s also important for businesses that conduct transactions online.

If you’re wondering whether your business needs cyber liability insurance, ask yourself whether your business does any business online. If the answer is yes, then you should invest in this insurance.

What does cyber liability insurance cover?

The main goal of cyber liability insurance is to offer your small business a financial lifeline if it suffers an online attack from hackers or criminals.

Ransomware attacks

If a hacker disables your company’s computers and won’t let you log back on unless you pay a ransom, cyber liability coverage might pay out to help you cover the cost of the ransom and regain control of your computers. It might also pay out to cover any loss of business you might have experienced when you were frozen out of your online systems.

And if you need to upgrade your online security following an attack? Your cyber liability insurance policy will help cover those expenses too.

Data breaches

If your business suffers a data breach in which the names, passwords, Social Security numbers or other personal information of your clients are exposed, your cyber liability policy will help cover any legal fees you face from customers who sue you and will help cover any business losses the data breach causes.

If you must spend money to notify your customers that their data was exposed, your cyber liability policy will help cover those costs too.

Investigations

Cyber liability policies might also cover the costs of any investigations you launch to discover the source of a cyberattack and any expenses you incur to recover stolen data.

Your small business might have to hire a public relations firm to help rebuild its brand after a cyberattack. If you have a cyber liability policy, it can help cover some of these PR fees.

How much does cyber liability insurance cost?

How much your small business pays for cyber liability insurance will depend on several factors, including the types of coverage that your policy provides.

Insureon, a digital agency for small-business insurance, estimates that the average cost of this insurance for small businesses is $145 per month, or about $1,740 annually.

That might seem like just one more expense that you must pay for when running a small business. But think about how expensive a data breach or ransomware attack could be. That investment in cyber insurance might seem like a bargain.

© YC Partners 2025