Cyberattacks are hitting every part of Pennsylvania—from law firms in Philadelphia to school districts in Scranton. While the state does not require businesses to carry cyber insurance, the financial and legal risks of a data breach make this coverage essential.
This guide explains who needs cyber liability insurance in Pennsylvania, what it covers, how much it costs, and what the law requires if your business experiences a breach.
Who Needs Cyber Insurance in Pennsylvania?
Pennsylvania businesses are not legally required to have cyber coverage for all entities. But under the Pennsylvania Breach of Personal Information Notification Act (BPINA, 73 P.S. § 2301–2329), any entity that maintains, stores, or manages computerized data that includes personal information must notify residents if that data is exposed in a “breach of the security of the system.”
If a breach requires notification to more than 500 affected individuals, you must also notify the Attorney General’s Office and all major credit reporting agencies. Failing to do so can lead to lawsuits, fines, and damage to your company’s reputation.
That’s why cyber liability insurance Pennsylvania policies are becoming common in high-risk industries like:
- Healthcare: HIPAA rules make Pennsylvania cyber insurance vital to protect patient records and avoid penalties.
- Finance: Banks, credit unions, and advisors must comply with GLBA and PCI DSS standards.
- Education: K–12 schools and colleges must protect student data under FERPA. Many have already faced costly ransomware attacks.
- Government contractors: State and federal contracts often require proof of cyber insurance coverage Pennsylvania to handle sensitive data securely.
- E-commerce and small business: Even a small firm collecting names, emails, or payment info needs protection.
- Insurance Licensees: As of December 11, 2023, are subject to the Pennsylvania Insurance Data Security Act (40 Pa. C.S.A. § 4501 et seq.), which requires them to develop and maintain an information security program, conduct risk assessments, and report certain cybersecurity events to the Pennsylvania Insurance Department.
What Does Cyber Insurance Cover?
A strong policy offers both first-party and third-party protection.
First-Party Coverage Helps your business respond directly to an incident:
- Forensic investigation and breach reporting: To determine the cause and scope of the breach.
- Customer notification and credit monitoring: Covers required notifications and access to credit monitoring services for 12 months if specific data (SSN, driver’s license, bank account number) is breached.
- Business interruption coverage: For lost income due to system outages.
- Ransomware negotiation and payments: Covers negotiation services and ransom payments (when permitted by policy and law).
- PR and legal response support: To manage public relations and navigate legal requirements.
Third-Party Coverage Protects your company from legal claims:
- Defense costs: If you are sued by affected individuals or other parties.
- Regulatory penalties: Where allowed by law (e.g., civil penalties under the Unfair Trade Practices and Consumer Protection Law).
- Vendor-related breach liability: If a third-party service provider’s negligence leads to losses for your clients.
For small and midsize businesses, cyber insurance for small business Pennsylvania coverage is essential to avoid huge out-of-pocket costs.
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Common Cyber Threats in Pennsylvania
Every year, Pennsylvania businesses report thousands of data incidents. Common risks include:
- Phishing and email scams: Hackers steal passwords or reroute wire transfers.
- Ransomware attacks: Criminals lock your system and demand payment to restore access.
- Lost devices: A misplaced laptop with unencrypted files can trigger costly notification laws.
- Third-party breaches: If your IT vendor is hacked, your business may still be responsible under state law.
Data breaches can cost businesses from $25,000 to over $500,000, depending on the size and industry. Education and healthcare claims are often the most expensive.
Cyber Insurance Cost in Pennsylvania
The cyber insurance cost in Pennsylvania depends on your business size, risk level, and security practices.
Typical Annual Premiums:
- Small businesses (under 25 employees): $ 1,200–$3,000
- Midsize businesses (25–250 employees): $2,500–$20,000
- Larger enterprises: $25,000 and up
Deductibles:
- Average small business deductible: $2,500
- May range up to $50,000 for larger or high-risk operations
Ways to Save on Premiums:
- Implement multi-factor authentication (MFA).
- Train employees on cybersecurity awareness.
- Encrypt all sensitive data.
- Keep strong backup systems.
- Bundle coverage with general liability or E&O insurance.
These steps show insurers that you are a lower risk—potentially reducing your premiums.
Breach Response Requirements Under PA Law
If your business suffers a cyberattack, the Pennsylvania Breach of Personal Information Notification Act (BPINA, 73 P.S. § 2301 et seq.) requires specific actions for any entity that maintains, stores, or manages computerized data that includes personal information about a Pennsylvania resident.
Key Requirements (effective September 26, 2024, due to SB 824 amendments):
- Definition of “Personal Information”: An individual’s first name or first initial and last name in combination with one or more of the following data elements if unencrypted, unredacted, or otherwise unaltered: Social Security number, driver’s license number, State identification card number, financial account number (with access code/password), medical information (if a State agency/contractor), health insurance information, or user name/email address with password/security question and answer to access an online account.
- Definition of “Breach of the security of the system”: Unauthorized access and acquisition of computerized data that materially compromises the security or confidentiality of personal information and that causes or the entity reasonably believes has caused or will cause loss or injury to any Pennsylvania resident.
- No Likelihood of Loss/Injury Exception: Notification is not required if, after a good faith investigation, it is determined that the breach has not caused and is not reasonably likely to cause loss or injury to any Pennsylvania resident. This determination should be documented.
- Notify Affected Individuals: Notice must be provided to any resident whose unencrypted and unredacted personal information was or is reasonably believed to have been accessed and acquired by an unauthorized person. This must be done without unreasonable delay, consistent with legitimate law enforcement needs or measures necessary to determine the scope of the breach and restore data integrity.
- Notification Content (Amended by SB 824): Must include contact information for major consumer reporting agencies and the Federal Trade Commission, and advise individuals to monitor account statements and obtain free credit reports.
- Credit Monitoring Offer (New for 2024): If the breach involved a Social Security number, driver’s license number, State ID number, or bank account number, entities must provide access to one independent credit report and 12 months of credit monitoring services at no cost to affected individuals.
- Notify Attorney General: When notice of the breach must be given to more than 500 affected individuals in Pennsylvania, notice shall be made concurrently to the Office of the Attorney General. The AG notification must include the entity’s name/location, date of breach, summary, and estimated total number of individuals affected (overall and PA residents).
- Notify Consumer Reporting Agencies: When notice of the breach must be given to more than 500 affected individuals at one time, the entity must also notify, without unreasonable delay, all nationwide consumer reporting agencies (as defined in 15 U.S.C. Section 1681a).
- Vendor Notification: A vendor that maintains, stores, or manages computerized data on behalf of another entity must notify that entity of any breach following discovery.
Alert your cyber liability insurance Pennsylvania provider within 24–72 hours, depending on your policy. Keep detailed records of all response actions: letters, emails, IT reports, and expenses.
Failure to act quickly or comply with BPINA can lead to enforcement by the Attorney General. Violations of BPINA are deemed an unfair or deceptive act or practice under the Pennsylvania Unfair Trade Practices and Consumer Protection Law, allowing the AG to seek injunctive relief, restitution, and monetary penalties for violations
Recent Legal Changes in Pennsylvania
Pennsylvania lawmakers are moving to strengthen data privacy and business accountability. Key developments:
- December 11, 2023: The Pennsylvania Insurance Data Security Act (40 Pa. C.S.A. § 4501 et seq.) went into effect, requiring insurance licensees to implement information security programs and report cybersecurity events.
- September 26, 2024: Significant amendments to the BPINA (73 P.S. § 2301 et seq.) became effective (via SB 824), lowering thresholds for AG/CRA notification (from 1,000 to 500 individuals), expanding definitions of personal information, and mandating 12 months of free credit monitoring for certain data breaches.
- 2025 (Proposed Legislation, SB 378): New privacy rules (e.g., Senate Bill 378, the “Student Data Protection Act”) continue to be introduced for K–12 vendors and potentially other educational entities. These laws are driving more schools and tech providers to carry cyber insurance.
- Proposed Legislation (e.g., HB 2147 in previous sessions): Proposed legislation has been introduced that would require IT contractors and vendors working with public agencies to carry active cyber insurance coverage Pennsylvania. This indicates ongoing legislative interest in this area.
Although Pennsylvania has not passed a sweeping comprehensive consumer data privacy act like California’s CCPA, enforcement of data breach laws is increasing every year.
Final Takeaways for Business Owners
Whether you operate a retail shop in Harrisburg or a dental clinic in Erie, you face real cyber risks. Without protection, one small breach can lead to legal penalties and financial ruin.
Cyber insurance for small business Pennsylvania policies offer affordable coverage, fast response help, and peace of mind.
With the right plan, you can:
- Meet Pennsylvania data breach notification law requirements.
- Protect sensitive customer and employee data.
- Minimize business downtime and reputational damage.
Ready to Protect Your Business? Call (855) 718-7552 to speak with a licensed agent.
