What is cyber liability insurance?
Short answer
Cyber liability insurance covers data breaches, ransomware, network interruption, and the third-party claims and regulatory actions that follow. It responds to data and network events, not to failed professional services, which is why technology firms usually carry it alongside E&O.
First-party cyber coverage
- Forensics and incident response
- Customer notification and credit monitoring
- Ransomware negotiation and system restoration
- Business interruption and extra expense during downtime
Third-party cyber coverage
- Defense and settlements for privacy lawsuits
- Regulatory investigation defense, including CCPA and CPRA matters in California
- Payment card brand assessments and fines where insurable
- Media liability, when endorsed
Common exclusions
Most forms exclude losses from unencrypted portable devices, prior known incidents, infrastructure outages not caused by an attack, and sometimes nation-state attacks. Social engineering fraud is often a sublimited add-on rather than part of the base form.
Common questions
- Does a BOP already include cyber coverage?
- Sometimes as a small sublimit, which is rarely enough for notification costs and defense. A dedicated cyber policy is usually the right fit for businesses holding customer data.
- What limits do small businesses buy?
- Many small businesses start between $1M and $2M, then increase as data volume and contract requirements grow. Pricing is subject to underwriting review.
- Are ransomware payments covered?
- Often, subject to sublimits and carrier pre-approval. Many forms require you to use approved vendors and to notify the carrier before paying.
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Professional Resource Insurance Agency, LLC. CA License #0G81238. Definitions are general information, not coverage advice for a specific policy.