Cyber Insurance

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.

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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.

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Margaret Rouse
Technology Expert

Margaret is an award-winning technical writer and teacher known for her ability to explain complex technical subjects to a non-technical business audience. Over the past twenty years, her IT definitions have been published by Que in an encyclopedia of technology terms and cited in articles by the New York Times, Time Magazine, USA Today, ZDNet, PC Magazine, and Discovery Magazine. She joined Techopedia in 2011. Margaret's idea of a fun day is helping IT and business professionals learn to speak each other’s highly specialized languages.