Cyber insurance premiums for small businesses have declined 15% year-over-year as new carriers enter the market and improved cybersecurity practices reduce claims frequency, making coverage more accessible for the first time since 2020.
Market Dynamics
The cyber insurance market has shifted from a hard market with soaring premiums to a more competitive landscape.
- Average annual premium for $1M coverage: $1,200 (down from $1,400 in 2025)
- 12 new carriers entered the SMB cyber market in the past 18 months
- Claims frequency dropped 22% as businesses improved basic security hygiene
- Ransomware payment coverage increasingly excluded or sublimited
What SMBs Should Know
Insurance brokers recommend shopping policies aggressively during this soft market. Key coverage areas to prioritize include business interruption from cyber events, data breach response costs, and social engineering fraud. Businesses with MFA, endpoint detection, and offline backups receive the best rates.
