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What Does Cyber Insurance Cover?

In today’s digital age, the importance of cyber insurance cannot be overstated. Businesses have recognized this need and have been obtaining cyber insurance to protect themselves from the financial and operational risks associated with cyber incidents. However, it is equally important for individuals to have personal cyber insurance.

From ransomware attacks to identity theft, individuals face a range of cyber risks that can have severe consequences. In this article, we explore the different aspects of cyber insurance for businesses and individuals, including what it covers and the types of malicious cyber operators that pose a threat.

Whether you’re a business owner or an individual, understanding the significance of cyber insurance is crucial for safeguarding your digital well-being in an increasingly interconnected world.

Cyber Insurance: Business vs Personal

Cyber insurance has become a virtual necessity for businesses.  With almost all insurers having excluded cyber risk from their property, casualty and other traditional insurance lines, most large corporate enterprises have at least some forms of insurance that specifically addresses cyber risk as a standalone matter.

As criminals and other malicious cyber operators have spread their interests and targeted small and medium size enterprises, insurers such as Cowbell Insurance have designed processes and policies that align to industry needs.  Whether large, small, or in-between, cyber insurance has become a necessity for businesses that want to be capable of continuing operations in the face of a cyber incident.

Cyber insurance has become an essential tool in our arsenal against digital threats, offering a safety net for businesses and individuals. As we navigate an online world rife with risks—from ransomware attacks to identity theft—the protection provided by cyber insurance policies is crucial. These policies not only cover many of the financial repercussions of cyber incidents, but also support recovery efforts. Being prepared for the unexpected in the digital age should be routine, just like having insurance for life’s other risks.

Kurt Sanger Cybersecurity Expert

Does Cyber Insurance Cover Ransomware?

Not yet as widespread, but just as important, is personal cyber insurance.  In the same regard that businesses need a mechanism to assure their continued ability to carry out activities and serve their customers during and after a network breach, people from all walks of life need to be able to continue the lives they are used to in the face of a ransomware event, identity theft, email compromise, or any other type of cyber incident.

With perils ranging from reputational damage, to bullying, to monetary loss, and the ability of malicious cyber actors to find new and devastating ways to exploit people’s information technology systems, the capacity to recover from an incident must go hand in hand with efforts to prevent incidents.  Prevention alone is essential, but for many it will not be adequate.

In the face of a cyber incident, individuals and families also should anticipate legal fees, technology restoration costs, the need to purchase new devices or services, and other response expenses.

Types of Malicious Cyber Operators

There are two categories of malicious cyber operators that all network or device owners, including individuals and families, need to be aware of and defend themselves against.  The first is someone who is looking for a target of opportunity, for example, a criminal who hopes to find money from anyone who has it.

The second is someone who is focused on a specific target, for example, an individual who feels aggrieved by or wishes to inflict harm on a specific person or organization.

The first category of malicious actors might be adequately defended against through prevention.  If they have no specific target, they will look for the target who has the  poorest defense and has what they are looking for.

Any employment of preventative cyber tools, such as password managers, identity monitors, and firewalls may distinguish one person from the same type of target who is not as well protected.  As the saying goes, you don’t need to outrun the bear … just outrun the guy running next to you.

The second type of malicious actor is not as easy to defend against.  The dedicated focus on a particular cyber target cannot be prevented by outrunning the guy next to you.  With enough time and with the right capabilities, any system can be breached.  Unfortunately, headlines emerging every day testify to the vulnerabilities of even the most well-defended systems including  federal, state and local government networks, financial institutions, technology companies and others suffer thousands of malicious events.

These events have proliferated and affected individuals who previously believed they were not on any hackers’ radar.  However, with so much data available about every American floating around the internet, it is easy to learn enough about someone to determine if their systems are targets worth pursuing and begin to think about a way to infiltrate those systems.

We all plan for events we hope will never happen.  This is why we buy car insurance, life insurance, flood, fire and hurricane insurance.  With so much of our personal and financial information captured in various systems, and with so many of our activities enabled by technology, it is time for everyone to consider cyber insurance as a key element of protecting against events that can have life-altering consequences.

What Cyber Insurance Covers

Personal cyber insurance can address many of the costs of recovering from an incident.  Depending on the terms of one’s policy, a policyholder can find coverage for costs such as recovering data, restoring systems, ransom demands, and fraudulent payments.  The specifics of what a policy covers can often be negotiated, as well as the details of the circumstances that make coverage available.

Some personal cyber insurance will come with professional guidance with regards to protecting one’s devices and networks or access to professionals who can assist policyholders after a cyber incident.

As much as having it is worthwhile for the costs that it covers after a triggering event, like most forms of insurance, its real value is in the peace of mind it brings.  Most information technology users’ understanding of their devices is far exceeded by their dependency on them.   While most cannot explain how their computers and smartphones work or the technical details of protecting them, insurance is an easy concept.

Given how much we rely on our technology, how valuable and private our personal data is, and how important it is to be able to make purchases, interact with government and other offices, and find information online, cyber insurance has become as important as insuring one’s car, home, or anything else valuable.

Individuals and families should consider their risks and examine the policies available in order to protect themselves from the serious harms that malicious actors are exploiting everyday.

To learn more about personal cyber insurance, online threats and identity fraud, visit our homepage at