Cyber insurance definition
Cyber insurance is an insurance policy protecting holders from the financial fallout of cyber attacks or data breaches. Cyber insurance typically covers the costs of investigations, notifications (for example, to affected customers), data recovery, system restoration, and legal fees and damages.
See also: data breach, cyberattack
Incidents covered by cyber insurance
There are different types of cyber insurance that cover various types of cyber incidents. These include:
- Data breaches: When sensitive or confidential data is stolen or lost, cyber insurance may cover the costs of investigating the breach, notifying affected parties, and providing credit monitoring services to customers.
- Cyberattacks: Cyber insurance can cover the costs of investigating hacking, malware, ransomware, phishing, and social engineering attacks, repairing damaged systems, and restoring lost data.
- Cyber extortion: Cyber insurance often covers the cost of paying a ransom to retrieve stolen data from hackers or unlock files encrypted by ransomware.
- Business interruption: Cyber insurance may cover an organization’s losses when a cyber incident (such as a ransomware attack) temporarily halts its operations. These losses include lost revenue, data recovery expenses, and staff retainer.
- Third-party liabilities: Certain cyber insurance policies may cover the costs of defending against legal claims filed by third parties (such as the organization’s customers) affected by the cyber incident. This includes claims for data breaches, privacy violations, or intellectual property theft
