Cyber Insurance

Cyber insurance, also known as cyber liability insurance, is a type of insurance that protects businesses from financial losses and liabilities resulting from cyberattacks, data breaches and other cyber incidents.

Coverage varies by policy but typically includes:

• Network security: Costs to recover your network after a breach, including data restoration and ransom payments.
• Privacy liability: Legal expenses and settlements if sensitive information is compromised.
• Business interruption: Compensation for lost profits and fixed expenses if your business is forced to shut down due to a cyber event.
• Errors and omissions: Protection if a cyber event prevents you from delivering promised services.
• Event response: Costs for forensic investigations, customer notification, and public relations.
• Regulatory response: Fines and penalties for failing to meet cybersecurity regulations.
• Cyber extortion: Payments for ransomware and related consultant fees.

• First-party coverage protects your business directly, covering costs like data recovery, lost income, customer notification and crisis management after a cyber incident.
• Third-party coverage protects you if another party sues your business for damages resulting from a cyber event, covering legal fees, settlements and regulatory response costs.

Any business that stores or processes sensitive information (like customer data, payment details or employee records) or relies on digital systems should consider cyber insurance. This includes small businesses, as 64% experience a cyberattack each year.

• The insurer assesses your cybersecurity risks and recommends a policy tailored to your needs.
• You pay a premium (monthly or annually).
• If a covered cyber incident occurs, you file a claim.
• The insurer covers costs up to your policy limits after you pay any deductible.

Yes. Policies can be tailored to your business’s specific risks, industry and budget. Standalone cyber insurance policies are usually more comprehensive than add-ons to other insurance

The required amount depends on your company’s size, industry and risk profile. Many small businesses start with $1 million in coverage, but higher-risk businesses may need more.

Common exclusions include:

• Incidents occurring before the policy start date
• Fraudulent or criminal acts by the insured
• Failure to maintain required security standards
• Nonpayment of premiums

Yes, most policies cover breaches caused by employee mistakes, such as falling for phishing scams or accidentally leaking data.

No, but it is strongly recommended, especially for businesses handling sensitive or financial data.

Consider:

• What types of incidents are covered?
• What are the policy limits and deductibles?
• Are both first-party and third-party coverages included?
• What are the exclusions?
• Does the insurer offer breach response support and a 24/7 hotline?
• Can the policy be tailored to your needs?

Yes, insurers may offer discounts if you meet certain cybersecurity requirements. Ask your agent about available discounts.

Some insurers offer fast online applications and can provide coverage within 24 hours.

Typically, no. General liability policies rarely cover cyber incidents, so a separate cyber insurance policy is recommended.

• Assess your cyber risks and data protection needs.
• Consult with an experienced insurance agent.
• Review your current cybersecurity measures.
• Compare policies from multiple insurers.

Keep up with premium payments and maintain the required cybersecurity practices specified in your policy.

Many policies cover incidents worldwide but always confirm with your insurer.

Your coverage may not be frozen immediately, but premiums could rise or coverage could lapse if payments are missed.

Regularly review your policy as your business grows or as cyber risks evolve to ensure you have adequate protection.