Cyber Insurance

Many policies cover losses caused by damage, theft, disruption or corruption of your electronic data. They also cover damage or theft of data stored on your computer system that belongs to someone else. For a loss to be covered, it must result from a hacker attack, virus, or denial of service attack. This policy generally covers the costs to restore or recover lost data. It may also cover the cost of outside experts or consultants you hire to preserve or reconstruct your data.

Many policies cover income you lose and extra expenses you incur to avoid or minimize a shutdown of your business after your computer system fails. The loss of income and extra expense coverage afforded under a cyber liability policy differ from that provided under your commercial property policy. Cyber policies cover income losses and extra expenses that result from an interruption of your computer system. Property policies cover income losses and extra expenses that result from an interruption in your business operations caused by physical damage to covered property, which does not include electronic data.

Cyber extortion coverage applies when a hacker or a cyber thief breaks into your computer system and threatens you and your business. For instance, a hacker may threaten to damage your data, introduce a virus, or shut down your computer system unless you pay him or her a sum of money. The perpetrator may also subject your computer system to a denial of service attack or threaten to release confidential data unless you pay the sum demanded. Extortion coverage typically applies to expenses you incur (with the insurer’s consent) to respond to an extortion demand, as well as the money you pay the extortionist.

Policies may cover the cost of notifying parties affected by the data breach by government statutes or regulations. They may also include the cost of hiring an attorney to assess your firm’s obligations under applicable laws and regulations. Some policies cover the cost of providing credit monitoring services for those affected by the breach. Some also cover the cost of setting up and operating a call center.

A data breach can severely damage your firm’s reputation. So, some policies cover the costs you incur for marketing and public relations to protect your company’s reputation following a data breach. This coverage is sometimes referred to as Crisis Management.