Cyber liability insurance covers data breach and cyber incident costs — using the same expected-value framework this site applies to extended warranties and pet insurance.
How it works
Estimated annual breach probability times average breach cost gives the expected annual breach loss. Subtracting the annual premium gives the net expected value of carrying the policy.
What this does not include
This doesn’t include non-financial costs like reputational damage or customer trust loss following a breach — real consequences beyond the direct dollar costs this calculator estimates.
How to use this calculator
- Enter estimated breach probability, average breach cost, and annual premium.
Frequently asked questions
What does cyber liability insurance typically cover?
Data breach notification costs, forensic investigation, legal fees, regulatory fines, and sometimes business interruption resulting directly from a cyber incident.
How can a business estimate its breach probability?
Industry benchmark data by business size and sector, along with an assessment of the business’s own security posture, informs a more accurate probability estimate than a generic guess.
Is cyber insurance required by law?
Generally not mandated broadly, though certain industries handling sensitive data (healthcare, financial services) may face regulatory or contractual requirements that effectively necessitate coverage.
