Browse Definitions :
Definition

cybersecurity insurance

Contributor(s): Matthew Haughn

Cybersecurity insurance is a contract that an individual or entity can purchase to help reduce the financial risks associated with doing business online. In exchange for a monthly or quarterly fee, the insurance policy transfers some of the risk to the insurer.

Many companies purchase cybersecurity insurance policies to cover extra expenditures that could result from the physical destruction or theft of digital assets. Such expenditures typically include the cost of notifying customers that a security breach has incurred, as well as the cost of regulatory compliance fines.

To qualify for coverage, the individual or entity typically has to submit to a security audit by the insurance company or provide documentation with the assistance of an approved assessment tool, such as that offered by the Federal Financial Institutions Examination Council.

Many cybersecurity insurance policies only cover first-party losses to a company. Some policies, however, may also cover third-party liability losses.

Depending upon the price of the policy, coverage may include first and/or third-party liability for cyberextortion, costs associated with strengthening data security, damages due to corrupt or missing data, damages due to inoperable hardware or software and monetary loss from theft or lost business.

Because coverage is not often for the total amount of damages, many companies choose to buy additional insurance to cover amounts beyond which a cybersecurity policy covers.

 

This was last updated in May 2017

Continue Reading About cybersecurity insurance

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

SearchCompliance

SearchSecurity

  • cybersecurity

    Cybersecurity is the protection of internet-connected systems, including hardware, software and data, from cyberattacks.

  • asymmetric cryptography (public key cryptography)

    Asymmetric cryptography, also called public key cryptography, uses a pair of numerical keys that are mathematically related to ...

  • digital signature

    A digital signature is a mathematical technique used to validate the authenticity and integrity of a message, software or digital...

SearchHealthIT

SearchDisasterRecovery

  • business continuity plan (BCP)

    A business continuity plan (BCP) is a document that consists of the critical information an organization needs to continue ...

  • disaster recovery team

    A disaster recovery team is a group of individuals focused on planning, implementing, maintaining, auditing and testing an ...

  • cloud insurance

    Cloud insurance is any type of financial or data protection obtained by a cloud service provider. 

SearchStorage

  • hard disk drive (HDD)

    A computer hard disk drive (HDD) is a non-volatile memory hardware device that controls the positioning, reading and writing of ...

  • byte

    In most computer systems, a byte is a unit of data that is eight binary digits long. Bytes are often used to represent a ...

  • network-attached storage (NAS)

    Network-attached storage (NAS) is dedicated file storage that enables multiple users and heterogeneous client devices to retrieve...

Close