Cyber insurance trends for small businesses
Businesses are relying more heavily on digital tools to manage payments, customer data, scheduling, and day-to-day operations, making cyber protection increasingly important.
Cyber insurance can help businesses recover from cyber-related incidents such as data breaches, ransomware attacks, email fraud, and other online threats.
Insureon, which has become the largest digital agency for small business insurance since their founding in 2011, offers cyber insurance coverage and other insurance solutions to small businesses in a wide variety of industries, including tech professionals, consultants, and more.
New Insureon data shows cyber insurance usage among customers grew 50% from 2023 to 2025, while completed purchases increased 59%.
"Small businesses rely on more digital tools than ever before, but many don't fully recognize the risk that comes with them," said Jeff Kroeger, president of Insureon. "Cyber protection is no longer just for tech companies. It's becoming a standard part of running a business."
Through April 2026, cyber insurance applications were up 18.5% year over year, while completed purchases increased 17.9%. This trend suggests that more businesses are making the move from considering coverage to purchasing it. Several factors contribute to this increase, including the growth of digital business tools and a broader awareness of cyber risk.
Why businesses are buying cyber insurance now
While technologies such as digital payments, cloud-based software, and online scheduling systems have helped improve efficiency, they can also increase exposure to cyber risks such as email fraud, payment scams, ransomware, and data breaches.
Many cyber incidents now stem from phishing scams, where attackers manipulate employees into sending money or sensitive information. Coalition's 2026 Cyber Claims Report found that business email compromise and funds transfer fraud accounted for 58% of cyber claims observed by the company.
In the event a business experiences a data breach, ransomware attack, or cyber extortion incident, cyber insurance can help cover expenses such as customer notifications, legal costs, and business interruption losses.
These risks are not just impacting large corporations or technology companies. They are affecting businesses across many different industries.
Cyber insurance demand is expanding across industries
As more business operations move online, small businesses across all industries are purchasing cyber insurance at a much higher rate than before.
Insureon saw some of the strongest cyber insurance growth among:
Many of these businesses handle sensitive customer information, process online payments, or rely heavily on software platforms and cloud services.
Demand is also growing among tax preparers, social workers, and mental health counselors, which reflects broader usage among service-based businesses.
Small businesses are driving much of this growth. Sole proprietors and firms with fewer than five employees make up the majority of cyber insurance buyers, with sole proprietors seeing especially strong growth in recent years.
Why businesses are bundling cyber coverage
Not only are more businesses buying cyber insurance, but they are also purchasing cyber coverage alongside other types of business insurance. The share of customers bundling cyber coverage with other policies grew from 68% in 2023 to 81% in 2025.
These policies often include:
- General liability insurance, which covers claims such as customer injuries or property damage.
- Errors and omissions (E&O) insurance, also called professional liability insurance, covers claims related to mistakes, negligence, or professional services.
Technology businesses that choose to bundle cyber with E&O coverage often can do so in a policy bundle called technology errors and omissions insurance, or tech E&O.
Bundling cyber coverage with other policies reflects how cyber incidents can overlap with broader business risks. A data breach or email scam can quickly lead to financial losses, legal claims, or reputational damage.
"Cyber protection is no longer just for tech companies. It’s becoming a standard part of running a business."
How much does cyber insurance cost?
Cyber insurance remains accessible for many businesses. Most businesses pay between $500 and $999 per year for cyber insurance coverage, although costs vary based on industry, revenue, number of employees, the amount of sensitive data handled, and risk exposure.
Premiums can range from around $200 for the smallest businesses to more than $17,000 for larger accounts with more complex risks.
| Business Revenue | Average Annual Premium |
|---|---|
Under $100K | ~$587 |
$1M-$2.49M | ~$1,754 |
$10M+ | ~$5,790 |
In some industries, premiums have become more competitive in recent years, helping make cyber coverage more accessible.
What Insureon is seeing in 2026
Early 2026 data suggests demand for cyber insurance is continuing to grow, particularly among smaller businesses and service-based industries.
Insureon is also seeing continued demand for bundled coverage as more owners recognize that cyber incidents can affect multiple parts of their operations.
Explore cyber insurance coverage options with Insureon
Insureon helps businesses compare quotes from top-rated insurance carriers and purchase cyber insurance online. Small business owners can complete Insureon’s easy online application to explore coverage options, compare pricing, and find policies tailored to their industry and risk profile.
Once you find the right policies, you can begin coverage in less than 24 hours and get a certificate of insurance (COI) for your small business.
