How does Cyber Insurance work?

Cyber Insurance covers financial losses that result from data breaches and other cyber-attacks.  In general, there are 2 types of coverage offered:

First-party coverage: this pays for expenses your firm suffers as a result of cyber-attacks such as:

  • The cost of informing your clients of the hack and providing them with free credit monitoring services.
  • Cyber extortion like ransomware attacks
  • Loss or damage to electronic data
  • Loss of income and extra expenses
  • PR and reputational damage

Third-party coverage: this pays for 3rd party liability that has suffered a loss as a result of your actions or omissions.  For example, you could be sued by a client who has their information leaked following a hack of your computer systems.

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