2024-01-01 · business, cyber

Cyber Coverage

Overview

Cyber insurance helps businesses manage financial losses from data breaches, ransomware, and other cyber events. Coverage can include both first-party costs (your direct expenses) and third-party liability (claims from customers or partners).

What cyber insurance typically covers

Incident response: forensics, legal counsel, and breach notification.
Data recovery: restoring systems and data after an attack.
Business interruption: lost income due to system downtime.
Cyber extortion: ransom payments and negotiation support.
Liability claims: damages and defense costs from affected parties.

Common exclusions and limitations

Failure to maintain security controls required by the policy.
Known vulnerabilities left unpatched.
War or state-sponsored attacks (varies by insurer).
Prior incidents that occurred before the policy period.

Cost factors

Industry risk: healthcare and finance typically pay more.
Data volume: the amount and sensitivity of data stored.
Security posture: MFA, backups, and training can reduce premiums.
Revenue size: larger companies face higher exposure.

How to choose a policy

Map your risk exposure: identify critical systems and data.
Review sublimits: ransomware and social engineering often have caps.
Check vendor coverage: ensure third-party incidents are included.
Confirm response partners: some policies include preferred vendors.

Best practices to reduce risk

Enforce multi-factor authentication and strong access controls.
Maintain offline backups and test restoration regularly.
Train employees on phishing and social engineering.

Frequently asked questions

Does cyber insurance cover regulatory fines? Some policies do, but coverage varies by jurisdiction and policy language.

Is cyber insurance only for large companies? No, small businesses are frequent targets and can benefit from coverage.