What is Cyber Insurance

A cyber insurance policy also known as the cyber liability insurance or cyber risk insurance coverage helps organizations to mitigate risk by offsetting costs involved with recovery after a cyber-related security breach or similar event takes place. Most sophisticated organizations can deploy the best cybersecurity protocols in place and still cannot guarantee 100% security. However, businesses can ensure this protection with a cyber-insurance policy. The rise in cyber-crimes indicates that businesses are seeking a need for cyber insurance.

What does Cyber Insurance cover?

Cyber insurance includes expenses related to first-party damage as well as claims made by third parties in the following scenarios.

Data Breach and Privacy Management

The insurance company covers the costs associated with the management of an incident related to cyber-crime. The covered expenses here include the cost of

  • Investigation
  • Data subject notification
  • Call management
  • Remediation
  • Credit checking for data subjects
  • Legal costs
  • Court attendance and regulatory fines

Multimedia and Media Liability Cover

This insurance covers the third-party damages including specific defacement of website and intellectual property rights infringement.

  • Extortion liability cover: The cyber insurance policy also covers the losses due to a threat of extortion and the professional fees related to dealing with the extortion.
  • Network security liability: This may include the third-party damages as a result of the denial of access, costs related to the theft of data on third-party systems etc.
  • In some cases, some of the cyber liability covers may overlap with other policies like professional indemnity, but a decent cyber insurance policy always ensures that the cyber risks are adequately catered for.

What is excluded from the Cyber Insurance

Third-party providers:

Suppliers and vendors of any kind can create huge gaps for their clients. If there’s a data breach due to their protocols, any resulting ramifications to your business is unlikely to be covered by your insurance.

Lost portable devices:
Insurance companies will not take responsibility for lost or stolen portable electronics. (Some companies will modify this policy if these devices are encrypted.)
War, invasion, or terrorism:
Any damage from government-sponsored groups or ideological origins may be excluded from the policy.
Security maintenance failures:

The company must meet and maintain minimum security standards to have an insurance claim approved.

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