Cyber insurance is a type of insurance product designed to protect businesses from risks related to information technology infrastructure and activities, particularly those associated with the internet. It is intended to provide financial security against damage caused by cyber incidents, including expenses for investigations, credit monitoring services, and legal fees. Cyber insurance policies are sold by many of the same suppliers that provide related business insurance, such as errors and omissions insurance, business liability insurance, and commercial property insurance.

Cyber insurance generally covers a businesss liability for a data breach involving sensitive customer information, such as Social Security numbers, credit card numbers, account numbers, drivers license numbers, and health records. It can also cover legal fees and expenses, notifying customers about a data breach, restoring personal identities of affected customers, recovering compromised data, repairing damaged computer systems, and providing breach hotlines that are available every day of the year at all times.

It is important to note that cyber insurance is often excluded from a general liability policy, which covers bodily injuries and property damage resulting from a companys products, services, or operations. Cyber insurance policies may also vary by provider and plan, and may exclude certain issues that are not covered by commercial liability policies and traditional insurance products.

Overall, cyber insurance is becoming increasingly essential for all companies as the risk of cyberattacks against applications, devices, networks, and users grows. It is a risk management technique that can help transfer network user risks to an insurance company in return for a fee, i.e., the insurance premium. By providing financial protection against cyber incidents, cyber insurance can help businesses mitigate the financial risks associated with doing business online and help protect their reputation and customers.