What Does Cyber Insurance Cover?
As a business leader, protecting your organization and its sensitive data is a top priority. Therefore having a strong and comprehensive security plan in place is key to maintaining your success. But it’s also important to have a plan in place if a worst-case scenario plays out such as a cyber attack that cripples your business for hours, days or weeks along with damaging your valued reputation.
As we continue our series on cyber insurance in the wake of the continuing rise of cyber attacks, hacking and phishing scams, we want to explore what cyber insurance covers and does not cover. In our last blog, we discussed the pros and cons of investing in cyber liability insurance. This week we are taking a closer look at what may be covered and what may be left out of your cyber insurance.

Cyber Coverage & Limitations
While every insurance policy and provider offers different options for cyber insurance, there are some commonalities when it comes to what is covered and what is not.
What Might Be Covered?
Be sure to ask your insurance agent before investing in cyber insurance. Typically there are basic areas that are covered in the case of a cyber event causing damage to your business.
Direct Financial Losses
When dealing with a cyber crime, there could be direct losses such as the theft of equipment, damage to technology or loss of income due to downtime or a network outage.
Indirect Financial Losses
Cyber insurance could cover the losses suffered by other businesses that work with a company facing a cyber incident.
Legal Expenses
Legal investigations often follow cyber attacks including those associated with regulatory groups. Legal support is typically necessary to coordinate with investigators and any potential lawsuits that come from the cyber attack.
Expert Consultation Expenses
Understanding how to resolve, remediate and recover from a cyber attack often takes the help of experts in their field who can get to the root cause of the attack and find ways to increase security so the event is not repeated.
Client/Customer Notification
During data breaches, there are legal notifications that need to be sent to clients/customers whose data or personal information was left vulnerable during the attack. These notifications can be costly and cyber insurance can help cover this cost.
Crisis Management Support
Depending on the scope of the cyber attack, many companies find it necessary to hire a PR consultant to handle bad press and deal with reputation management.
What Might NOT Be Covered?
Cyber insurance does not usually cover physical damage or bodily injury. However, these components of any cyber attack may be covered by other forms of business insurance. Many insurers will also include an exception for cyber terrorism and terrorist actions during a time of war.
Cyber insurance may also have some exceptions for preventable security issues that were not addressed prior to the attack, or infrastructure failures that existed previously. Cyber insurance also doesn't cover costs incurred to improve cybersecurity after an attack or breach.
Talk to our team at Spectra Networks about whether cyber insurance is right for your business and what types of coverage you will want to request going forward.
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