What Is Cyber Liability Insurance and Does a Non-Profit Need It?

What Is Cyber Liability Insurance and Does a Non-Profit Need It?

Non-profits have specific risks that other businesses may not have. They may store sensitive information about donors or members on their network, including credit card numbers or other personal information that could be exploited by hackers.

The average cost of a data breach is $4.35 million, and the average time to identify a data breach is 7 months.

A cyberattack could put non-profits out of business for a significant amount of time and cost them the trust of potential donors and members.

Here are a few reasons why non-profits need cyber liability insurance:

  1. Non-profit organizations rely on free software and cheap web hosting. 
  2. Poor password security caused by a fluctuating staff or volunteer population 
  3. As non-profits increasingly rely on social media to spread the word about their activities, social media hacking has become more common. 
  4. A non-profit's ability to collect funds and get grants may be harmed by a data breach.

How cyber liability insurance for non-profits works—and why it’s so important to invest in it:

          Cyber liability insurance for non-profits is insurance that protects against the financial consequences of a cyberattack or data breach. Non-profit organizations may not be able to handle the expenses associated with a data breach without Cyber liability insurance.

          This insurance can help cover the costs associated with restoring systems and data, paying fines or legal fees, and suffering a loss of business due to a security incident. It also includes costs associated with notifying donors, staff, or volunteers affected by a breach and the cost of PR activities involved after a cyber incident.


There are two ways to protect a non-profit organization from cyber risk:

First-party cyber insurance:

First-party cyber insurance covers the organization when it is the victim of a cyber incident. First-party cyber insurance can help protect against damages that include data loss, stolen information, and IP theft. It can also cover the costs associated with legal action if someone reports your organization as a cybercriminal.


Third-party cyber insurance

Third-party cyber insurance covers the organization when it is the perpetrator or an agent of the perpetrator. It is also useful in preventing lawsuits brought by customers or donors if they have concerns over how their personal information was used.

Both types offer different levels of protection and coverage, so it is important to know what you need.

How much does cyber liability insurance cost?

Cyber liability insurance for non-profits can range in price based on how much coverage a specific organization needs. In general, cyber liability insurance for non-profits costs between $3,000 and $5,000 per year.

Things to be aware of when obtaining cyber insurance for charity organizations:

Instead of hacking, cybercriminals frequently collect sensitive data and information using social engineering. You might or might not be protected against losses brought on by social engineering, depending on your policy.

If a non-profit has been hacked in the past, it may be charged a higher premium for its cyber liability insurance. This is because insurers know that these organizations are at a higher risk of a data breach.

A cyber liability policy will almost always come with a deductible. If you have a cyber liability policy, it is important to know what the deductible is and how it works.


Non-profits are inherently mission-driven. They exist to serve their communities and support causes beyond simple profit. Because non-profits do not operate with the same profit motive as for-profit businesses, cyber liability insurance can be a challenge for them to obtain.

A non-profit may not be approved for insurance or may pay a high rate if they don't protect its network at all. Therefore, having a solid cybersecurity plan for your non-profit is essential.

Please get in touch with us if you have any questions concerning business continuity, backup and recovery, or cybersecurity strategies for your non-profit.