How Much Does Cyber Insurance Cost for a Small Business?
Understand what you can expect to pay and what influences your premium
Cyber insurance is increasingly essential for small businesses, but cost is a key concern. Fortunately, premiums are typically affordable—especially compared to the potential financial fallout of a data breach or ransomware attack. The actual cost depends on your business size, risk exposure, and the coverage you choose.
You might think about this the next time you upgrade your systems, collect more client data, or consider expanding your services online.
Typical Cost Range for Small Businesses
Most small businesses in Canada can expect to pay between $500 and $2,500 per year for a cyber insurance policy. For businesses with fewer digital touchpoints or minimal data exposure, costs can be on the lower end. More complex or high-risk operations may see higher premiums.
| Business Type | Estimated Annual Premium |
|---|---|
| Freelance consultant | $400 – $800 |
| Small e-commerce retailer | $800 – $1,500 |
| Medical or legal practice | $1,200 – $2,500 |
| Tech startup or SaaS firm | $1,500 – $3,000+ |
Tip: Many insurers offer bundled policies with general liability and property coverage, which can lower your total cost compared to buying each separately.
Factors That Influence Cost
Several key variables affect your cyber insurance premium:
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Number of employees: More users means more potential entry points for attackers.
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Volume of stored data: Sensitive customer or financial data increases exposure.
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Industry type: Some industries, like healthcare or finance, are more heavily targeted.
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Cybersecurity practices: Businesses with up-to-date security tools and employee training may receive lower rates.
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Coverage limits and deductibles: Higher limits or lower deductibles increase premiums.
What You Get for the Cost
Even a basic cyber insurance policy typically includes:
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Breach response and legal coverage
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Notification and credit monitoring costs
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Ransomware support and reimbursement
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Business interruption income
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Public relations and crisis management
These features help you recover quickly and professionally when an attack occurs.
Planning for Your Budget
Cyber insurance is often more affordable than most business owners assume. In many cases, the premium for an entire year is less than the cost of handling a minor breach on your own. Plus, having a policy in place can make you more attractive to clients who require strong data protection.
Note: If your business signs contracts with larger organizations, they may require specific cyber coverage levels. Always check your obligations before finalizing a policy.
Choosing the cheapest policy may leave out key protections like social engineering coverage or system recovery support. It’s better to match the policy to your risks than to shop on price alone.
Cyber insurance costs vary, but the protection it offers is often invaluable. For small businesses, it’s a modest investment with the potential to save thousands—or even your entire operation—when a digital threat becomes a real-world problem.