Definition - What does Cyber Insurance mean?
Cyber insurance is a form of insurance for businesses and individuals against internet-based risks. The most common risk that is insured against is data breaches. Cyber insurance typically includes indemnification from lawsuits related to data breaches, such as errors and omissions. It also covers losses from network security breaches, theft of intellectual property and loss of privacy.
Techopedia explains Cyber Insurance
Several high-profile data breaches have prompted some insurance companies to offer cyber insurance policies to protect customers from the effects of network threats, such as data breaches.
These policies typically include first-party coverage against losses related to cyber attacks, such as hacking, malware, theft and extortion, as well as indemnification against lawsuits related to these attacks that customers may bring. The indemnification extends to errors and omissions that may have caused the attack, such as failing to secure a network. Policies also often include public relations responses to an attack.
The downside of cyber insurance is that insurers always want to minimize risks, therefore potential customers are subjected to extensive evaluations of their security procedures before an insurer covers them.