What does cyber insurance typically cover?

Insurance policies designed to address cyber risks typically cover a variety of costs and damages associated with cyber incidents. Some common coverages include:

1. Data Breach Response Costs: These can include expenses related to notifying affected individuals, hiring forensic experts to investigate the breach, setting up call centers for customer inquiries, credit monitoring services, and more.

2. Legal Expenses: Coverage for legal costs related to data breaches, such as defense costs in case of lawsuits, regulatory fines, and penalties.

3. Cyber Extortion: Protection against costs incurred due to cyber extortion threats, such as ransomware attacks.

4. Business Interruption: Coverage for lost income and extra expenses resulting from a cyber incident that disrupts the business operations.

5. Reputation Management: Insurance may cover costs associated with public relations and reputation management efforts to restore the business’s image following a cyber incident.

6. Third-Party Liability: Coverage for claims made by third parties, such as customers or business partners, for damages resulting from a cyber incident.

7. Network Security Liability: Protection against costs resulting from failing to protect sensitive information, leading to a data breach.

It’s essential to review the specific terms and conditions of each insurance policy to understand the extent of coverage provided.