Cyber Insurance

What is cyber insurance?

Cyber insurance is intended to help protect businesses from loss resulting from digital risks such as data confidentiality breaches, technology disruptions and cyber extortion.

What is typically covered under cyber insurance?

Cyber insurance can cover loss resulting from a range of cyber events, including:

• Data confidentiality breaches: The loss of and/or unauthorized access to your network and your data, for example disclosure of confidential or personal information.
• Technology disruptions: A technology failure or denial-of-service attack.
• Cyber extortion: A demand for payment under threat of causing harm to your data; for example, disabling your operations or compromising your confidential data.

Note: This list is not exhaustive as cyber coverage can vary from insurer to insurer and can be customized to address the needs of a particular organization.

What sort of protection does cyber insurance provide?

Cyber insurance can help your business cover several costs resulting from these events, including:

1. Notifying affected parties and mitigating potential harm from a privacy breach, such as providing credit monitoring to affected individuals.
2. Network systems and electronic data restoration expenses.
3. Security breach remediation and notification expenses: 
   1. Forensic investigations expenses: Hiring a firm to investigate the root cause and scope of the data breach.
   2. Legal costs and civil damages: Paying for legal representation and possible damages related to a privacy or network security breach.

Isn’t cyber risk already included in my business insurance?

No, most property or liability policies do not cover cyber risks, data or have offer very limited coverage. 

Types of cyber insurance

Cyber insurance products are provided in one of three ways:

1. Stand-alone cyber insurance policies (policies specifically for cyber risks) are the most common cyber policies in Canada, the United States and Europe.
2. A traditional property and liability insurance policy that may include limited coverage for some cyber events. These policies typically have low limits that would not cover the full cost of a breach or cyber attack.
3. Endorsements (also known as riders) can add, remove or exclude certain cyber coverages, altering a cyber or traditional insurance policy to meet specific needs.