Insurance 101: What’s Covered in Cyber Liability Insurance?

Many companies, big or small, utilize IT services to make specific tasks and processes more manageable. While it’s highly effective, it’s not always safe because there’s always a risk of being under attack by hackers and cybercriminals. One perfect way to protect your system from these threats is by having cyber liability insurance.


Cyber liability insurance is a form of insurance that protects you against possible cyber attacks. It pays for damages that a cyber attack could cause. This includes, but is not limited to, losses due to cyber extortion, ransom, and theft. Additionally, it can also pay for losses due to mistakes in data, purposely false or fraudulent claims, or even third-party claims. However, like any other form of insurance, there are some limits as to what cyber liability can cover.

This article will discuss what is and isn’t covered by cyber liability insurance. Read on below to get started.

What’s Covered by Cyber Liability Insurance?

Cyber liability insurance usually covers most of the damages caused by cyberattacks, including:

Data Restoration

Data restoration covers the costs of rebuilding or restoring your data. If your system is under attack by malware, such as ransomware, your data may be lost or corrupted. To prevent this, you may need to seek assistance from IT experts.

Loss of Income

Losing your data doesn’t just mean that you need to rebuild or restore it; you also need to get back to work. If your system is attacked and you experience any downtime, you’ll most likely lose money. But if you have cyber liability insurance, the company will pay the cost.

Cyber Extortion

Even though most attacks nowadays simply steal data, others are just to make money. These include ransomware and cyber extortion, which is a threat that involves a ransom note. This is essentially a ransom to get your data back. Some companies even pay it because the alternative is to lose their data. In this case, cyber liability insurance also covers the ransom.

Crisis Management

One of the worst things that can happen after a cyber attack is that the incident can spiral into a PR crisis. If a company is looking for cyber liability insurance, coverage for crisis management is usually included. This includes providing public relations services, offering advice on dealing with the public, and coordinating responses to media inquiries.

Notification Costs

Getting attacked by hackers may make some people nervous, especially when they think their personal information will be leaked. This may make them question where they can get help or how they can protect themselves. Cyber liability insurance can cover the cost of notification to people who may be affected.

Regulatory Proceedings

Attackers are getting more and more complex. They sometimes leave backdoors on systems to make them easier to access if they want to break back in. If such an attack is found and the company is investigated, they can also get sued. This is where cyber liability insurance can come in to make the process easier.

Additional Expenses

Like any other insurance, most policies are not limited to what’s also covered by other policies. If you have cyber liability insurance, it includes any additional expenses you may incur due to a cyber-attack.

What’s Not Covered by Cyber Liability Insurance?

Cyber liability insurance covers almost everything, but it’s not entirely comprehensive because there are things it won’t cover. These may include:

Lost Profits

Cyber liability insurance only covers the loss of profits due to technical failures. It doesn’t cover the loss of revenues or income since it’s expected that you’ll be making money. In this case, you may need to look for business interruption insurance to cover such expenses.

Costs Involved in Curing Defects

Sometimes, you may need to pay for professional assistance to fix technical defects, even after a cyber attack. This may include paying for IT experts and consulting firms to clean and maintain the system. However, costs involved in curing defects aren’t covered by cyber liability insurance because they are considered costs incurred to maintain a regular business.

Cyberattacks Due to Negligence

Cyber liability insurance doesn’t cover costs associated with cyberattacks due to negligence on the victim’s part. This means that it doesn’t cover data recovery costs if you can’t prove that you didn’t act quickly enough.

Information-Breach Liability

The laws governing data security are becoming more strict. If there’s a data breach, the company can be sued by consumers. However, if there’s no negligence and it’s proven, the company can’t be held liable for it. In this case, a data breach doesn’t fall under cyber liability insurance because it’s a form of information-breach liability.


Cyber liability insurance is one of the best ways to protect your businesses against cyberattacks’ many threats. If you want to make sure that your business is well-protected, this is one thing you shouldn’t miss out on.

If you’re looking for cyber liability insurance in NYC, Jeff Bernard has your back! We also offer comprehensive policies in other areas, such as homeowners’, personal liability, and term life insurances, all for affordable prices. Reach out today to learn more!

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